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Lending For Homeowner House Purchase Up Nearly A Quarter To Six Year Peak

Lending for homeowner house purchase increased by 24 per cent year-on-year in October, according to figures from the Council of Mortgage Lenders (CML), and was up 17 per cent on September.

Overall, 60,800 loans were advanced in October, worth a total of £9.7 billion and was the second highest monthly lending amount for home-owner house purchase since November 2007.

mortgage deedMeanwhile, 26,800 loans were advanced to first-time buyers in October, up 33 per cent on October 2012.

Buy-to-let lending also increased in October, up to 16,200 compared to 14,600 in September.

However, the number of loans advanced to those remortgaging fell in October, both on a monthly and an annual basis.

Paul Smee, director general of the CML, commented: “After years of a relatively flat mortgage market, 2013 has shown signs of lending turning a corner and looks set to finish the year strongly. Increased financial optimism among the public as the economy recovers seems to be driving this upward trend and it is welcome to see that first-time buyers continue lending momentum as more look to own their first home.”

Ashley Brown, director of the independent mortgage broker Moneysprite, comments: “In the space of just twelve months, mortgage lending has gone from halting to hyper. First-time buyers in particular have been lining up to borrow – with the number taking out a mortgage up by a third on this time last year.

“Spurred on by competition, and with access to cheap cash under the Funding for Lending scheme, lenders have slashed rates to hugely appealing levels.

“But they cannot last. In Spring the Funding for Lending Scheme will be refocused on business loans, and without its stimulus, interest rates will rise.

“While the property market is stronger than it has been in years, there is no guarantee that its momentum will continue to drag levels of mortgage lending ever upward.

“When mortgage rates begin creeping up, as they must inevitably do next year, will they cool the house-buying stampede? I doubt it.

“Growth rates should return to more sensible levels, but there is so much pent-up demand and consumer confidence is so buoyant in many areas that the trajectory must continue upwards.

“With the rock-bottom rates likely to melt away like snow in Spring, anyone looking to fix their mortgage or secure a great rate should act now.”

Article Date: 13/12/2013