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First-time buyers boost mortgage lending

First-time buyers are fighting their way back into the property market. The Council of Mortgage Lenders (CML) has seen a 24% month on month increase in the value of mortgages taken out by first-time buyers. Overall lending is now up by 22%.

The CML report also identified that thanks to cheap mortgage rates, first-time buyers are putting a record low percentage of their income towards mortgage payments, down to just 17.9%.

The diagram below shows the latest CML data and it also reveals that there has been a growth in home mover lending, remortgage activity and buy-to-let. Click here to find out more from CML.

Source: CML Regulated Mortgage Survey (April 2005 onwards), CML Economics. Pie chart courtesy of CML website data.

Paul Smee, director general of the CML, commented, “Notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates. It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility.

After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts.”

According to the CML data, the increase in the number of loans for houses was due to both first-time buyers and home-movers. 54% of lending was house purchase loans, 25% remortgages and 17% buy-to-let. It’s worth noting that during the downturn, buy-to-let lending fell more than home-owner lending, so buy-to-let figures show a much stronger recovery. The main driver behind the buy-to-let performance is the remortgage activity. After a slow start to the year, remortgage activity has increased year-on-year and month-on-month.

Henry Knight, Managing Director, Springtide Capital, added, “It’s positive to see first-time buyers making up an increase in lending, the help and support from government combined with more competitive rates is starting to have an impact. As Paul Smee mentioned, we have also seen a significant increase in remortgage activity resulting in a far more buoyant mortgage market”.

If you would like to discuss your mortgage needs please talk to one of our Mortgage Consultants by calling us on 020 3040 4400 or visit our website by clicking here.

Please note this article does not constitute as a prediction or advice, please seek professional and qualified advice to discuss your own circumstances.


Springtide Capital Limited is authorised and regulated by the Financial Conduct Authority.

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