First time buyers are returning to the housing market.  Variables have come together to make conditions optimal for many that had been sitting on the fence and waiting for a moment to give them confidence and the ability to buy.  One of the variables at play is the Funding for Lending Scheme put into place by the Bank of England in August of last year.  The scheme made funding cheap for lender’s loans and kept them from finding funding on the global lending market.  This kept funds readily available to borrowers and interest rates cheap. 

According to a recent report from the Council of Mortgage Lenders (CML) the number of first time buyers has increased to the highest level seen in the past three years in November.  A total of 21,700 loans were advanced to first-time buyers with a value of £2.7 billion.  In a comparison to the previous year, the number of first time buyers increased by 24% and in a comparison to the previous month there was an increase of 8%.

Homeowners have yet to show a strong demand for remortgages at the same level as first time buyers.  Some experts believe that homeowners are finding it as hard to come up with the adequate equity and deposit needs for a remortgage as first time buyers had coming up with deposits.  House prices have declined to levels that have robbed homeowners of the equity that would allow them the most affordable remortgages.  Yet, now that lenders are more competitive and are seeking to do business with homeowners and home buyers without the tight criteria of months ago, the deals available are better.  Reconsideration of a remortgage or mortgage may offer a much better interest rate than what was offered before the Funding for Lending scheme went into effect.