The November data on the mortgage lending industry has revealed that the level of lending was boosted thanks to the number of first time buyers.  The Council of Mortgage Lending (CML) announced that there was an increase in November’s mortgage lending for purchases by 6% over October and 13% over November 2011.  For the second consecutive month first time buyers pushed the mortgage lending accounting for 41% of the overall total.  The usual average of first time buyers is closer to 38%.  First time buyers took out 21,700 loans at a value of £2.7 billion.  This is an increase of 8% over October and 24% over November 2011.

Many experts are crediting the Funding for Lending Scheme put into place in August for the increased demand from first time buyers.  Through the scheme lenders have been able to keep lending cheap for borrowers with low interest rate offers.  Not long after the scheme began lenders were offering historically low interest rates below 3%.

Paul Smee, director general of CML, said, "We expect the Funding for Lending scheme to continue to encourage a downward drift in interest rates. This may prompt an increase in remortgage activity as borrowers seek to take advantage of lower rate.”

There is an expectation of the Bank of England’s Monetary Policy Committee (MPC) to keep the standard base rate steady through the year.  This coupled with the Funding for Lending scheme should keep lending both available but also affordable for borrowers.  Should first time buyers return to the market it could stabilize house prices which would go against what many experts believe will be a year of further decline in house prices.