The volume of lending to first-time buyers almost doubled year-on-year in February to £11bn, compared to £5.6bn in the same month last year.
The data from CACI also shows that the value of applications by first-time buyers in the first quarter of this year was the highest since 2022, according to analysis by First Direct.
Application volumes reached £24.2bn for Q1, up by 37% from the same period last year.
More first-time buyers applied for mortgages in February than any month since March 2022, with applications for the month totalling 49,982.
This year’s Q1 numbers are similar to 2021’s figures for the same quarter, where the total value of first-time buyer applications was £24.7bn.
It marks the strongest quarter for first-time buyer growth since Liz Truss’s disastrous mini-budget in September 2022.
The average value of first-time buyer mortgages was £215,000 for the first quarter, but it reached a peak of £219,340 in February – the highest it has been in recent years.
First-time buyers accounted for an average of 35% of the total for new mortgage business, while home-movers accounted for 34% and remortgages 31%.
These positive figures come as the Building Societies Association calls on the Government to consider radical action to support home ownership in a new report.
First Direct head of mortgages Liam O’Hara says: “It’s been a positive start to the year across the mortgage market, with the volume of first-time buyer applications ahead of home movers and remortgages, shooting up to numbers not seen in nearly two years.
“If we cast our mind back to the New Year, we saw most mortgage providers reduce mortgage rates considerably in response to reduced swap rates.
“The positive impact of this was seen across the market, with first-time buyer mortgage applications flooding in across February.”
He adds: “There are a number of factors that influence loan value – but overall, an increase in average loan value is a positive sign that mortgage affordability is increasing and that people are in a position to borrow more.
“A factor could be that first-time buyers are applying for mortgages with smaller deposits opposed to necessarily opting for more expensive houses, although the data shows only a marginal increase in people opting for higher LTV mortgages of 90% and above, compared to the same period in 2023.”
