In 2016 the amount of money borrowed by first-time buyers rose 13.5 per cent compared to the previous year, as a total of 338,900 first-time buyer mortgages were taken out for a total value of £53.2bn.
These figures come from the Council of Mortgage Lenders (CML) and represent the highest level of first-time buyer borrowing since CML records began.
Borrowing amongst these new property owners reached an all-time monthly high of £4.8bn in December, with house prices also increasing to record levels during the same month. The average house price for the UK now sits at £220,000, up £15,000 from December 2015.
However, there was a 13.2 per cent drop in the number of buy-to-let investors compared to 2015, with just 102,100 buy-to-let loans taken out last year. A significant reason for this decrease is the change to stamp duty tax, which affects the profits of the investors, as the government attempts to free up more affordable homes for first-time buyers.
Meanwhile, remortgaging activity jumped 20 per cent last year to £66.3bn as 385,000 owners switched mortgages, taking advantage of record-low rates, and it represents the highest level of remortgages since the 2009 recession.
“Despite everything the housing market last year defied expectations,” said Jonathan Sealey, chief executive of Hope Capital.
“Although we are still below pre-crisis levels, to show any kind of increase in such an unpredictable year gives hope for 2017. For the time being, interest rates look set to remain low, and there are plenty of great deals to entice borrowers.
“Supply is the constant problem, and we will have to wait and see how the government’s plans to ‘fix the housing market’ are actually implemented.”