The number of first-time buyers has jumped dramatically as they accounted for almost half of all mortgages taken out in December, Mortgages Direct’s monthly survey reveals.

First-time buyer numbers increased by 11% in December to 48%, the highest level since the survey began.

Peter Gladdy, director of Mortgages Direct, said:
"The dramatic increase in first-time buyers in December, accompanied by a slight increase in buy-to-let mortgages, goes against all normal seasonal trends and may well reflect a renewed determination to get onto the housing ladder."

"The general optimism evident in the house price predictions for 2007, which range from growth of 3.5% to as much as 10% has also helped these buyers take the plunge."

Gladdy added:
"First-time buyers have been able to take advantage of some good fixed rate deals and the high level of loans may also be a reflection of the increased generosity of lenders offering income multiples of up to five times."

Mortgages Direct’s survey also reveals that 94% of borrowers are continuing to opt for fixed rate mortgages, down only 3% from November, with two-year fixed deals remaining the most popular at 58%.

However, there was a slight increase in demand for variable rates in December with 6% of borrowers opting for these mortgages.