Mortgage lending to home buyers has grown significantly in the past year, enabling a number of first time purchasers to step onto the property ladder.
The number of available mortgages has risen by a third since the launch of the Government’s multi-million pound Funding for Lending Scheme (FLS), giving lenders access to cheap finance in order to help borrowers.
The scheme, initiated last August, has boosted the UK’s mortgage market that fell flat during the recession in 2008.
According to the Council of Mortgage Lenders (CML), 38,300 loans were advanced for house purchase in January – an annual increase of 11%.
For the first time in five years, there has been a 24% increase in mortgage lending to first time buyers, with 15,900 loans worth £2 billion approved to this group at the beginning of the year.
The surge has been significant in Wales, with £240m worth of loans offered to first time buyers – a stark 14% increase since the latter end of 2011.
The CML reported that Welsh new buyers borrowed an average of 3.12 times their income in the fourth quarter of 2012. In total, 8,700 loans were advanced to this group in Wales.
Tony Jones, Managing Director of Penarth based estate agent ACJ properties, said that the boost is great news for buyers in a difficult economic time.
He commented: “Five years ago new buyers in Wales were really struggling to buy their first home in Cardiff or Penarth. With the introduction of the FLS and a better market, the significant increase in mortgage loans has given young people an opportunity to invest in bricks and mortar.
“Although there are still substantial problems in the economy, rates are lower and banks are willing to lend to people on lower incomes.
“We have a number of high-quality homes for sale in Cardiff and Penarth, which are now at affordable prices for new buyers.
“With low crime rate and good schools, South Wales is a fantastic place to buy a house, and this means that more people will be able to settle in the capital and the surrounding areas.”