Some 14,100 loans worth £1.7 billion were taken out by first time buyers, up 8% by number and 6% by value from January and up 18% by number and 21% by value on last February.
Home movers took out 22,500 loans worth £3.7 billion, a 2% increase in number and a 3% increase in value from January and a 16% increase in number and 19% increase in value from February 2011.
House purchase lending rose in February. Some 36,600 loans worth £5.4 billion were taken out, up 4% by number and 2% by value from January and up 17% by number and 20% by value from February last year.
Remortgaging continued to decrease in February. £3.3 billion was advanced, a 6% fall compared both to January 2012 and February 2011.
For the first time since April 2011, there was an increase in the proportion of income first-time buyers spent on mortgage interest payments, from 12.1% in January to 12.5% in February. The CNL said that this is likely to reflect a combination of factors including an increase in average first time buyer income multiples from 3.19 to 3.23 and a modest increase in some borrowing rates.
This still leaves mortgages for first time buyers much more affordable than as recently as 2008, when first time buyers on average spent 19.6% of their income on mortgage interest payments. First time buyers borrowed on average 80% of their property’s value in February, unchanged in over a year.
Since the summer of 2011, more than 95% of first time buyers have taken out repayment loans and February's proportion was 96%, unchanged from January. Repayment loans to new home movers and remortgagors also increased in February from 81% to 82% for home movers and from 76% to 77% for those remortgaging.
Some 51% of first time buyers bought properties priced between £125,000 and £250,000 in February, up from 49% in January. February was the last full month of the stamp duty concession although next month's data is expected to bring a further rise in first-time buyer numbers as they moved to beat the 24 March deadline.
‘It is encouraging to see the continuing year on year improvement in house purchase lending. However it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first time buyer numbers and how much this may be offset by the government's NewBuy scheme, available to all buying a new build property,’ said CML director general Paul Smee.
Paul Hunt, managing director of Phoebus Software said that an annual increase of more than a fifth in the value of first time buyer lending looks pretty chunky. 'But we have to treat the number with caution. Stamp duty played a big role in February and March in boosting the market as first timers scurried to complete before the end of March,' he pointed out.
'The LSL/Acadametrics reports that transactions rose by 32% in March, suggesting that first timers contributed to a large spike in demand last month.The proof of the pudding will be when we get the numbers for April, which will show us the size of the drop off in demand now that first timers have to find larger deposits to satisfy the taxman. Certainly, the size of the increase in lending is a cause for optimism, but it would be a mistake to get carried away while the size of the impact of stamp duty remains unknown,' he added.
