Mark Dyason, director, Edinburgh Mortgage Advice, comments:
"The CML is describing what we are seeing on the ground, namely the return, in very large numbers, of the first time buyer.
"In Spring, something happened. The first time buyer said enough is enough, I'm going to buy. They have been sick of waiting for a long time and are now committing en masse.
"First time buyers have been starved of finance for so long that now it's here, and they feel more confident about their jobs, they are making the most of it. They're also wary that rates are unlikely to get much better than they are right now.
"First time buyers are being helped not just by better rates and less stringent criteria at higher LTVs but also product innovation. Lenders are being much more aggressive in order to get business.
"The Leeds Building Society, for example, has launched a sub-5%, 85% LTV three and five year fixed rate product offering three and six-month payment holidays respectively at the front end.
"The return of the first time buyer has created a virtuous circle of borrowing. Their return means other homeowners can now upsize and that's causing the market as a whole to improve.
"With Help to Buy Mark 2 on the horizon, things look set to improve yet further."
Jeremy Duncombe, Director, Legal & General Mortgage Club, comments:
“It’s pleasing to see yet more positive data adding to the renewed optimism of recent weeks. Confidence is key to any market and it seems that the housing market has shaken off the lethargy it has been dogged with. However, it is still relatively early days and the importance of Government stimulus measures in this recovery must not be forgotten.
"There is still a lot of hard work ahead to ensure that this upward trajectory continues over the long term.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"Government attempts to get the banks lending again are clearly working. The improvement in high loan-to-value lending in particular has resulted in a surge in number of first-time buyers. While all sectors of the lending market saw an improvement in lending volumes in May, it was first-time buyers who benefited the most.
"Average deposits have fallen and continue to do so as lenders offer more innovation and better rates at higher LTVs. With the Government expected to supply more detail on the Help to Buy guarantee scheme in the next fortnight, we expect the number of first-time buyers to continue to improve.
"While we are some way from the volumes of lending done at the height of the housing boom, things are certainly moving in the right direction. However, we need confidence to continue to improve to persuade more homeowners to trade up and move on, resulting in more stock coming to market."
George Spencer, chief executive officer of property and technology company Rentify, says:
"Significant growth in the buy-to-let market is occurring alongside the recovery in the residential mortgage market, not at the expense of it. The growing trend for people to live on their own means landlords are spotting opportunities and expanding their portfolios while first-time buyers are also managing to get on the housing ladder if they have the necessary deposit and income to do so. However, buying doesn't suit everyone - the flexibility of renting is more important to some."
LSL expects the CML’s higher lending to continue until end of Q3
The CML’s figures out this morning are hugely encouraging showing all lending up and lending to first time buyers up by 42% this May compared to May last year. LSL thinks this is directly attributable to the Funding for Lending scheme and lenders releasing products at higher loan to values, but only expects it to continue until the end of the third quarter.
David Copland, director of mortgage services for the financial services division of LSL says:
“These encouraging statistics reflects all the activity we’ve been seeing with brokers and estate agents across Pink and First Complete.
“First time buyers have been helped by the FLS scheme and lenders lending at higher loan to values and relaxing their criteria a little bit. In addition the new build market is very buoyant a good deal of which is being bought by first time buyers through the Help to Buy scheme although this has now been extended to second time buyers, which is particularly helping the new buy market at the moment.
A lot to do with FLS and encouraging that Carney said that which means the market will continue to be buoyant.
“I see no reason why it won’t continue for the next quarter especially given Mark Carney’s comments that we will be in a low interest rate environment for some time to come. My concern is that we have a hiatus in the market which will result in a slowdown in the fourth quarter of this year when lender could well restrict lending to some extent as they prepare for the implementation of the Mortgage Market Review, and some borrowers may hold off taking out a mortgage until the second part of the Help to Buy scheme comes in, in January, at which point they will need much smaller deposits and the government will underwrite 20% of the loan.”
Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), comments:
“It is encouraging to see the surge of lending in CML’s latest figures which suggests that first-time buyer and buy-to-let activity can prosper side-by-side. But what we must avoid is the creation of a two-tier housing market where property ownership becomes the preserve of the lucky few who can save for a deposit or borrow funds from relatives, while those less fortunate are left to bear growing rental costs.
“The shift towards higher loan to values (LTVs) shows that lenders are pushing back against restrictive capital requirements and finding ways to help more people onto the property ladder. The Help to Buy mortgage guarantees should improve things further, so the pressure is on George Osborne to unveil a detailed proposal that lives up to expectations.
“Rather than weighing lenders and brokers down with excessive guidance on affordability, the Chancellor should trust the rules set out in the Mortgage Market Review (MMR) and focus instead on ensuring fair pricing, effective administration and capital relief. It is vital that specialist lenders are supported alongside mainstream banks so as not to unbalance the market.”
