First-time mortgage enquiries on the rise

02/09/2009

Requests for mortgage advice from prospective first-time buyers increased during July to account for 43 per cent of all home loan enquiries.

New data from Unbiased.co.uk shows enquiries from those looking to get on the first rung of the property ladder were the biggest driver of mortgage advice over the course of the month.

The second biggest area of consumer enquiries was for remortgaging advice, which edged slightly lower from 33 per cent of all requests in June to 30 per cent in July.

However, Unbiased.co.uk said, this is still higher than the 28 per cent share recorded in April and May.

David Elms, the advice site's chief executive, said: "These July figures suggest that after a slight drop off last month, there is regained interest from first-time buyers thinking of entering the market."

The rise in requests for mortgage advice comes after new figures from the Land Registry showed house prices recorded their biggest monthly rise in five years during July.

Average property values ended the month at £155,885, the government department said.

In related news, the Ministry of Justice has launched a new collection of online articles and videos to help existing homeowners in debt who are facing repossession.

The advice covers everything from first arrears to court proceedings, the BBC reports.

According to the Council of Mortgage Lenders, there were 11,400 repossessions during the second quarter of the year, an increase of 14 per cent year-on-year.

EuroDebt director Kevin Still said: "There is probably a dilemma for many prospective first time buyers, do you take the risk that the house prices have bottomed out and take out a mortgage with relatively uncompetitive rates or wait for lenders to start returning with better fixed rate or variable products with reasonable rates relative to the base rate?

"Job security remains a key threat and interest rates may rise in the next 12 months. These factors need to be taken into consideration when taking financial advice so that budgets are not drawn up too tightly based upon low or promotional rates.

"EuroDebt would expect there to be rising interest in remortgaging or equity release to resolve growing unsecured debt problems.

"EuroDebt's average homeowner on a Debt Management Plan has over £35,000 of unsecured debt with over eight creditors. Many people have seen the rates on their credit card borrowing rise steeply in the last 18 months."

Tags; Housing Debt and Bills, Young Family Finances,

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