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First-time buyer numbers increased in February

Lending to both first-time buyers and home movers increased in February with first-time buyers taking the bigger increase, according to figures released from the Council of Mortgage Lenders.

Around 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.

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.

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.

Fifty-one per cent 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 24th March deadline.