First-time borrowers rise to highest level for 6 years The Council of Mortgage Lenders (CML) announced in August that mortgages to first-time borrowers (FTB) has risen to its highest level for 6 years. They report that a total of 68,200 loans were offered to those buying their first homes in Q2 2013, with a record 25,300 mortgages being offered in June alone worth £3.5bn. This is a 40% increase from the figures for June 2012 and that FTBs accounted for 46% of the overall mortgage market in June, against the 44% they represented in the previous month. On average these FTBs borrowed £117,000 in June an increase from the average £112,500 borrowed in May. By CML calculations the typical FTB consumed 19.3% of their net income in acquiring the loans, unchanged from the May figures. There was, however, a slight increase in the loan-to-value ratio to 81% in Q2, a small increase of 1% from Q1. With mortgage rates at record lows, thanks to the continuing low base rate of 0.5%, the total house lending market improved with a total of 55.400 loans being offered, worth £8.5bn. This is 18% higher than the same month last year. At the same time re-mortgaging was robust with £3.7bn being advanced in June, an increase of 19% year on year. Commenting on this data, the Director General of the CML, Paul Smee, was quoted as saying|: “First-time buyers have become a strong driver in the growth of mortgage lending this year proving that market conditions are favourable for them.” Lending to home movers also increased on a year-on-year basis, with 30,100 loans being made, worth £5.1bn, an increase of 6% from June 2012.
86% of all mortgages are now fixed-rate, thanks to the record low interest rates, representing the largest proportion for more than 20 years. Markets (July) (Data supplied by the Outsourced Marketing Department) With the more positive economic data coming out of the UK and the USA this month, together with more stable fiscal and political noises coming from Europe, the equity markets regained some, if not all, of their losses incurred in June. The FTSE100 closing at 6,621.1 saw a 6.53% gain for the month, with the wider FTSE250 advancing 7.79% to finish at 14,873.13, whilst the junior AIM market saw a 4.33% rise to 718.87. The FTSE100 is now only 309 points below its all-time high or 0.08% below its long-term trend, echoing investors’ renewed enthusiasm for risk assets. Over the pond there was similar positive sentiment with the Dow Jones rising by 3.96% to finish July at 15,499.54 and the NASDAQ closing at 3,626.37 for a 6.56% improvement on the month. The European bourses followed this trend with the Eurostoxx50 gaining 6.36% to finish at 2,768.15. Japanese sentiment was less bullish. The Nikkei225 remained stable, closing at 13,668.32 for a very modest fall of just 0.07%. The currency markets marked time with little volatility. Sterling remained at US$1.52 against the greenback, but lost 2.56% against the Euro, closing at €1.15. The Euro itself also gained a modest 1.54% against the US Dollar finishing July on US$1.32. On the commodity front, gold had a better month recovering 6.62% to stand at $1,324.15 an ounce. Meanwhile black gold, oil, rose by 4.65%, with the benchmark Brent Crude price ending July at US$106.91 a barrel.

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