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First Time Buyer Up Lift?

It's no secret that mortgage lending has declined but market data has shown a shift in trends for first time buyers.
In October 46,000 mortgages were approved which is still down on September, by about 4%, and down on the same month in 2009 by around 16%.

But the same data shows an overall decrease in the size of a deposit required by a first time buyer. September showed that the typical deposit was around 24% but in October this had deflated to 20%.

Not only this, but the vast majority of first time buyer mortgages issued in October, some 93%, were repayment mortgages as opposed to interest only.

Before the credit crunch, in 2007, the figure for first time buyers taking a repayment mortgage was only around 70%.

However, the Council of Mortgage Lenders (CML) state that this trend change is because of tougher lending criteria and the withdrawal of interest only mortgages by lenders in a pre emptive move towards regulators wishes for more cautious lending.

"The shift shows lenders have been adjusting their loan criteria in anticipation of possible regulatory changes, and a recognition that repayment mortgages may be in the best interests of less experienced borrowers such as first-time buyers," a CML spokesman said.

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