FTBs borrow record amount in 2016

FTBs borrow record amount in 2016

According to recent research, those trying to get onto the housing ladder borrowed a record amount of money during 2016.

Contrary to previous market slowdown fears, the amount of money going towards first-time buyer mortgage loans rose by 13.5%  last year, equating to a total of £53.6 billion. This figure is the highest since 2006; the year the Council of Mortgage Lenders (CML) began to record the data.

£4.8 billion was borrowed by first-time buyers in December 2016, boosting the market even further and helping 2017 to get off to a strong start.

According to the Office for National Statistics, property prices similarly grew in the final month of 2016, rising by 7.2% over the course of the year.

The latest figures from the House Price Index show that the average property price has grown monthly by around £3,000 to £219,544. This is a yearly growth of £15,000.

Despite predictions that the market would slow down in 2017, annual figures from the ONS point to an element of resilience. Although house prices unsurprisingly fell in the wake of the stamp duty changes and the referendum vote, it did not take long for them to resume.

Whilst the number of first-time buyers may be growing rapidly, the home-mover market is doing so at a more moderate rate.

£74.2 billion was borrowed by home-movers in 2016, growing only by an annual 2.2% according to the CML.

However, it is important to note that a key cause of increased borrowing is the rate at which house prices are rising.

In comparison, the number of home sales is rising much more slowly.

In 2016, the CML state that 801,600 property transactions with a mortgage occurred; this is a growth of under half of 1%.

Home-mover numbers fell by 2% to 360,400, whilst the number of first-time buyers grew by 8.4% to 339,100.

Affected by the second home stamp duty changes, buy-to-let investors fell to 102,100, a drop of 13.2%.

Remortgaging, in contrast, saw its highest numbers since 2009, with 385,000 homeowners switching to a different mortgage.

Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

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