First-time buyers make comeback in December

First-time buyers made a record comeback in December, with numbers going up 11 per cent and accounting for almost half of all mortgages, new research shows.

Mortgages Direct's monthly survey reveals first-time buyers made up 48 per cent of all mortgages last month, the highest level since the survey began in December 2005.

The company says increased income multiples offered by lenders along with improved financial security had given first-time buyers a "new found determination" to get into the property market.

The findings follow recent news of a 26-year low in first-time buyer numbers last year (full story).

"The dramatic increase in first-time buyers in December, accompanied by a slight increase in buy-to-let mortgages, goes against all normal seasonal trends and may well reflect a renewed determination to get onto the housing ladder," said Peter Gladdy, director of Mortgages Direct.

Mr Gladdy also said positive predictions of house price growth of 3.5 to ten per cent in 2007 had encouraged first-time buyers to get on the property ladder last month.

He added: "First-time buyers have been able to take advantage of some good fixed-rate deals and the high level of loans may also be a reflection of the increased generosity of lenders offering income multiples of up to five times.

"However, first-time buyers should be careful not to over-stretch their finances and make sure that they are confident about being able to afford the repayments, especially when deals end."