The housing market has had a deep need for first time buyers but it seemed as if they would stay away due to a lack of confidence in the economy and the tight grasp of lenders on funds.  Yet, in October there were many that gained lending approval and purchased their first property.  According to the Council of Mortgage Lenders (CML) there was a 14% increase in the number of first time buyer mortgages in comparison to the previous month. 

There were almost 20,000 first time buyer mortgages advanced in October.  The average deposit was 20% which by past standards is quite a difficult amount to obtain through simple savings for most households.  The value of the loans increased in October over September from £2.2bn to £2.5bn.  The value of first time buyer mortgages in October 2011 amounted to £2.1bn.  First time buyer mortgages accounted for 40% of purchase lending, which marked the second month in a row for such a level.

Overall the data released for October 2012 from the CML revealed that there were 49,500 advances for house purchases.  This compares with the September level of 43,500 mortgage advances.

Remortgage lending was also up in a month to month comparison of September to October with 26,900 homeowners switching to a new lender.  It was however at a lower level than the remortgage activity reported for October 2011 by 13.8%.

CML director general, Paul Smee, remarked, “More positive figures in October, after a slow September, suggest the underlying trend in house purchase lending of modest year-on-year growth will continue. However, usual seasonal factors may act as a counter to lending levels in the coming months.

“An up-tick in remortgage lending may be an early sign of a small positive impact of the Funding for Lending scheme, but it's still too soon to evaluate its effects.”