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Strongest start to the year for first-time buyers since 2007

Tim Wallace
First-time buyers have seized the chance to snap up properties without stamp duty, and it could drive the rest of the housing market forwards - Nick Gregory /Alamy

More first-time buyers climbed onto the property ladder in January than in the first month of any year since 2007, as low interest rates and the cut to stamp duty boosted the number of new homeowners.

A total of 24,500 first-timers bought in January, according to the banks and building societies in industry group UK Finance, a rise of 7pc on January of 2017 and the strongest figure for 11 years.

By value their loans totalled £4bn in the month, up 11.1pc on the same month a year earlier.

January is typically the weakest month for home sales, but the stronger data this year indicates a new surge could be on the cards at the entry-level end of the market.

This “points to a solid start for the UK property market in 2018,” said Brian Murphy at brokerage the Mortgage Advice Bureau.

“They tend to underpin the rest of the market, which was evidenced by the corresponding increase of those borrowing to move home.”

Estate agency Haart said it had seen more demand from this end of the market with first-time buyer registrations up 15pc on the month and 20pc on the year.

It comes after Philip Hammond said 60,000 purchasers had benefitted from the stamp duty break for first-time buyers introduced in November’s Budget.

The Office for Budget Responsibility said the scheme had also been used for higher-priced properties than expected, meaning the tax relief is more generous than initially anticipated.

Remortgaging levels also spiked as homeowners sought to protect themselves against further interest rate rises.

UK Finance said 49,800 borrowers remortgaged in January, up 19pc on the year to a nine-year high.

By contrast buy-to-let levels were down 5pc with 5,600 loans for landlords in the first month of the year.

This follows a slowdown in the buy-to-let market after a series of measures were introduced to raise taxes and calm the market, including higher stamp duty, the removal of mortgage interest tax relief and tougher lending rules for banks.