Home purchases by first-time buyers in the U.K. climbed to a 13-month high in April as mortgage rates stayed close to record lows, according to data compiled by LSL Property Services Plc.
Transactions rose 15 percent from the previous month to 22,000, the highest since March 2012, the broker said in a report published today. The average mortgage rate climbed to 4.31 percent from a record low of 4.29 percent in March, the company said.
“An improvement in the availability of high loan-to-value mortgages allowed more first-time buyers to realize their dreams of home ownership,” LSL Director David Newnes said in a statement. “Increased lender confidence has led to lower rates and a wider range of first-time buyer mortgages.”
U.K. house prices had their biggest annual increase in 18 months in May as the Bank of England’s Funding for Lending Scheme gave more people access to mortgages, Nationwide Building Society said last week. The program has allowed banks on average to grant loans of more than 80 percent of the value of homes, LSL said.
The average price of homes bought by first-time buyers rose 2 percent to 138,632 pounds ($213,264) and 36 percent of buyers needed direct funding from family members to pay their deposit, according to the report.
Nearly half of all would-be first-time buyers said their inability to save for a deposit was the barrier to buying a property, LSL said.