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The number of first-time buyers has reached its highest level in a decade amid an overall cooling in the housing market, new figures from UK Finance have revealed.

In 2017 there were 365,000 first-time buyers, the highest number since 2006. This is an increase of 7.4pc compared to 2016, or a difference of around 25,000 first-time housing purchases, the trade association for banks and finance firms reported.

Monthly levels of mortgage lending for first-time buyers, home movers and buy-to-let purchases all fell in December, however. First-time buyers accounted for £5.1bn of new lending in the month, 1.9pc down on the same period in 2016. The figure for home movers fell 3pc to £6.5bn of new lending in December.

Stamp duty rates | Comparing England and Wales

Paul Smee of the UK Finance said that weaker December figures were consistent with the trade body’s predictions for “subdued growth” in mortgage lending in 2018.

Mr Smee said: “We are also seeing a less buoyant buy-to-let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year.”

Buy-to-let mortgages saw a significant year-on-year fall. December saw 9,900 landlords taking out these mortgages, an 11.6pc drop on the same period in 2016. This follows regulatory changes to the buy-to-let market.

Higher stamp duty for second home buyers, along with the scrapping of other tax allowances and more in-depth assessment of mortgage affordability for portfolio landlords have all driven a slowdown in the buy-to-let market.

As house prices have risen in some areas, such as London, rents have failed to keep pace. Therefore the yield gained by renting out a property has become less attractive – another likely cause of the slowdown. This has lead some landlords to focus on areas such as the North East, where rents are rising more quickly, but property is still far cheaper.

Brian Murphy of the Mortgage Advice Bureau said that the figures pointed to a “flat market” in 2018. He added that it was “a reassuring result given political and economic factors, and also provides us with a steady start for 2018″.

Remortgaging activity was strong in 2017, as people sought to remortgage ahead of November’s interest rate rise, and likely rises in the year ahead.

UK Finance figures showed that average first-time buyers are aged 30 and have an income of £41,000. First-time movers, by contrast, were nearly a decade older, with earnings of £55,000 a year.

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