Lending to first time buyers seems to be on the up, with reports stating that the amount borrowed in December was a rise of 18 per cent on the year before.
In December 2015, first time buyer borrowed £4.5 billion to purchase homes, spread between 29,300 loans, according to the Council of Mortgage Lenders (CML).
Overall, home movers in general reportedly borrowed £6.6 billion, an increase of 20 per cent year-on-year.
Remortgaging for December, on the other hand, was down in both terms of value, and number. However, it was still up compared to December 2014.
While figures state that more is being lent to first time buyers, indicating that more people are buying their first property, this may not actually be the case. As starter home house prices are rising, more has to be lent out to each first time buyer, so that they can buy a home, boosting that figure.
Another report has come out, commissioned by the Local Government Association (LGA), in which Savills have gathered figures showing that the market of starter homes may not be so great after all.
Apparently, the affordable starter homes that have been built across the country aren’t so affordable. In order to qualify for the starter homes, people reportedly wouldn’t be able to afford those very homes in 220 council areas. Furthermore, only 45 per cent of average earners, with a 5 per cent deposit, will be able to afford a starter home in England at all, and in a lot of cases, first time buyers are those who earn below an average amount.
The housing spokesman of the LGA, Peter Box, said “In some places, such as the North-East and Midlands, the scheme will give people better chance to get on the housing ladder.
“However, a national scheme will not work for every area and fewer people will benefit from starter homes in areas where the housing crisis is most acute.”
