UK First-Time Home Buyers Hit Six-Year High

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The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June.