Inside Access - February/March 2013
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Return of the First-Time Buyer

The challenges facing first-time buyers are well known; lenders have tightened their lending criteria and are reluctant to take on riskier mortgagors. In an effort to alleviate these problems the Government launched its Funding for Lending Scheme last year.

Initially Funding for Lending appeared to be only benefitting those who didn’t really need it. However, the Bank of England’s latest Credit Conditions survey indicates that the benefits are finally starting to trickle through to those requiring high Loan to Value mortgages. Lenders reported an increase in the availability of secured credit to households, which included borrowers at Loan to Value ratios of 75 per cent and over. Lenders expect a significant increase in availability of secured credit in the first quarter of 2013, across all Loan to Value ratios.

The improving situation for first-time buyers was confirmed by figures released by Halifax. They show a 12 per cent increase in the number of first-time buyers in 2012 compared to 2011; the highest number since 2007. However, the number of first-time buyers in the market is still 50 per cent lower than the height of the market in 2006.

Lending availability is likely to remain a significant challenge this year. However, with Funding for Lending starting to improve the availability of mortgage credit across all Loan to Value ratios there is reason for guarded optimism.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances and loan amount. The fee is up to 1.5%, but a typical fee is 0.67% of the amount borrowed.

MAB 5624

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