First-time buyer mortgage approvals fall 48%

| September 9, 2008 | 0 Comments
First-time buyer mortgage approvals fall 48%

The Council of Mortgage Lenders (CML) has reported that in July, 47,400 house purchase loans worth £7.1 billion were approved.

The figures are similar to June’s but represents a 51% fall in volume and 54% decline in value on July 2007.

Remortgages rose by 14% to 85,000 but in value terms were 16% down on June, at £11.9 billion.

July saw little monthly change in the figures for house purchase loans but there were fewer approvals for first-time buyers.

During the month, loans to first-time buyers declined to 17,300, down 5% on June and 48% on July 2007.

The average first-time buyer deposit rose from 13% in June, to 15% in July.

As a result, the average loan-to-value ratio for a first-time buyer fell to 3.24 times income, down from 3.33 times income in June and reverting to the level recorded in July 2006.

Home mover mortgages increased to 30,100 in July, up 3% from June but 53% lower than July of last year.

Home movers typically borrowed 68% of the value of the property, down from 72% a month earlier.

The CML’s director general, Michael Coogan, commented that tighter lending criteria had made it more difficult for first-time buyers to enter the market and that many may in fact be waiting for house prices to stabilise.

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