More money than ever before was borrowed by first-time buyers last year.
Reports released by the Office for National Statistics (ONS) revealed that a record £53.6bn was lent to first-time buyers in 2016; the highest amount since records began in 2006. This also represents a 13.5% increase on first-time buyer lending in 2015. December was a strong month for the UK housing market, as £4.8bn was borrowed by first-time buyers during the final month and house prices increased dramatically, growing by 7.2% in the year up to December 2016.
Mortgage Lending Increases
The average UK property is listed for £220,000, and despite a slowdown in January 2017, we are seeing a housing market which is staying resilient amid an uncertain financial climate and changes to tax. However, although first-time buyers lending increased rapidly, the growth of home-movers borrowing wasn’t quite as significant. While still showing an upward trend, those moving house borrowed £74.2bn in 2016, which was a 2.2% increase on 2015.
The State of The Housing Market
House prices have risen, which accounts for the increase in money borrowed for mortgages, but in real terms, the actual number of people borrowing money gives us a clearer picture of people’s buying intentions. The number of first-time buyers increased by 8.4% to 339,100, but the number of people moving home fell by 2% to 360,400. The amount of people remortgaging rose to 385,000, which was the largest number since 2009. House prices are also expected to continue to rise in 2017.