Lending to first-time buyers soars in January
New figures released by the Council of Mortgage Lenders (CML) reveal a sharp rise in the rate of mortgage lending.According to the report, lending to first-time buyers rose by 37 per cent year-on-year in December 2013. Lending to this group rose increased by 30 per cent on the fourth quarter of 2012 and rose in volume by 23 per cent on 2012.Remortgage lending in December was down ten per cent in volume compared to November but up 31 per cent year-on-year. It was up eight per cent year-on-year for that quarter, resulting in a two per cent yearly increase in 2013 compared to 2012.According to the Bank of England, gross mortgage lending was £16.8 billion in December, up 49 per cent compared to December 2012. In 2013, gross lending totalled £176.4 billion, up 21 per cent on 2012.Commenting on the data, CML director general Paul Smee said: "In 2013, there has been a resurgence in the mortgage market with year-on-year growth for all types of borrower. First-time buyers were an especially important factor in driving the market forward in 2013 as improved economic conditions, as well as the introduction of government schemes like Help to Buy, have given the opportunity for them to enter the market and become home-owners."However, Mr Smee warned that a number of challenges lie ahead, particularly in implementing the Mortgage Market Review regulation in April and in ensuring a property bubble does not develop.House prices are currently rising significantly. In January, prices rose by 0.7 per cent, making them 8.8 per cent higher than in January 2013, according to the Nationwide house price index. They nevertheless remain around four per cent below their 2007 peak.Fears of a housing bubble have grown in some quarters, as prices in London and the south of England have soared. Ernst and Young's Independent Treasury Economic Model (ITEM) Club recently warned the average price of a home in the nation's capital could reach £600,000 by 2018.
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