Mortgage Data: First Time Buyers Prevalent in UK Housing Market

UK 22 August 2009 - The number of mortgages being approved for house purchases is continuing to increase at a steady rate this year.

The British Bankers Association revealed that the value of house purchase loans was 46.7% higher this June than last June, and .6 Billion Pounds higher than the previous month, the number of loans approved for house purchases was up just over 3000 on the previous month, and 64.7% higher than a year ago. And now the Council of Mortgage Lenders has revealed a further 26% increase in house purchase loans in July.

However, the number of people remortgaging is still falling, according to the BBA the number of people remortgaging in June was 51.8% lower than June last year -- when it was already drastically low -- and there were over 2000 less than the previous month.

This would seem to indicate that there is a high prevalence of first time buyers in the market, compared to those trading up.

This does not indicate a healthy housing market likely to see a sustained recovery according to Richard McKay of Private Sales Property portal Zungalow.com.

"Yes, if the housing market was in normal times then a high prevalence of first time buyers is great, but when all other buyers are practically drying up, leaving us completely reliant on first time buyers, then further price falls are likely just around the corner. Especially when you consider how many of those first time buyers are borrowing off mum and dad to pay the hefty deposits necessary to get decent mortgage deals. Not everyone can afford that, and the number is getting less and less as unemployment soars," he said.