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Loans for First-time Borrowers Increase

Written By On 13/09/2013

Forty one per cent more first-time buyers were granted mortgages in July in comparison with the same month a year earlier. Over twenty five thousand mortgage loans were acquired according to the Council of Mortgage Lenders.

First-time buyer loans were also up by five per cent on the previous month of June. The average age of the first-time borrowers was thirty years old.

The CML's director general, Paul Smee, said

This is a positive sign of a mortgage market where obstacles to transactions are now reducing.

However, this has fuelled more flames on the speculation of a possible 'price bubble' in the UK housing market. It has prompted the Royal Institution of Chartered Surveyors to call for a 5% yearly cap on property inflation.

RICS are asking the BOE's Financial Policy Committee to think about limiting annual property price rises to stop any possible boom and prevent ‘dangerous build up in household debt.’ The Surveyors Institution goes on to say they are not 'wedded' to a 5% cap, but feels it would be more prudent for prices to increase in relation to smaller incomes, which has stood at approximately 3% for the last twenty years.

Chancellor George Osborne says that Britain is ‘turning a corner’ as reports show that the British economy is at it's most robust in fifteen years.

Recent results delivered by the Office for National Statistics earlier in the week shows unemployment falling by 0.1% to 7.7% for the last quarter. Mark Carney announced a few weeks ago that the BOE will not increase interest rates until it hits at least 7%.

The governor of the Bank of England now declares the British economy is ‘picking up’, but is concerned that it may turn out to be ‘false dawn’ so we need to to remain ' vigilant'.