LESSER SPOTTED FIRST TIME BUYER MORE COMMON THAN YOU THINK

Confidence started returning to first time buyers (FTBs) at the beginning of this year according to the John Charcol Index, the new monthly mortgage activity monitor from John Charcol, the UK’s leading independent mortgage adviser. The index reveals a sharp increase in the proportion of purchases made by first time buyers in the first four months of this year, with that proportion being 31⁄2 times higher than in the previous 4 months. “The return of significantly more FTBs in to the market this year, despite the lack of high LTV mortgages, is one of the best indicators of confidence we’ve got at the moment. A surprising number of FTBs have managed to find deposits of at least 25% in order to access a wider choice of mortgages and get a cheaper deal. Many branches of The Bank of Mum and Dad have proved more robust than many of our High Street banks, haven’t needed a Government bail-out and recognise that providing their son or daughter with a sizable deposit is often a good way of utilising their savings,” comments Ray Boulger of John Charcol. Boulger continues, “Banks and building societies bemoan their ability to attract savings in the current low interest rate environment but their mortgage rates give them the best gross margins they have experienced for many a long year. With parents providing bigger than ever deposits for their FTB children, some families have found a way of cutting out part of the middle man’s turn!”Fixed rates now 82% of all lendingThe proportion of all applications for fixed rate mortgages (i.e. not just FTBs) continued to climb in the last month, from 80.9% in March to 82% of all business written by John Charcol in April. This number is over 70% higher than the proportion of fixed rate applications in January, when it stood at 47.8%.The John Charcol Mortgage Index is published monthly, tracking three important statistics, based on mortgage business written by John Charcol. The index is a leading indicator of trends being based on mortgage applications submitted to lenders, whereas figures reported by the Council of Mortgage Lenders (CML) and the Bank of England (BofE) are based on completions, which typically take place 2-3 months after the mortgage application is submitted. The three statistics tracked each month are the percentage split:• Between Fixed rates, Capped rates and Tracker/Discount rates*.• Between Purchases and Remortgages.• Of First Time Buyers compared to all Purchasers.