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Home lending fell to £51.3 billion in the final three months of 2014, a drop of 8.1% compared with the previous quarter but was just 0.2% lower than the same quarter in 2013, new data shows. The figures from the Bank of England also shows that new commitments also decreased, from £53.6 billion in the third quarter of 2014 to £46.3 billion in the fourth quarter, a decrease of 8% compared with the final quarter of 2013. The proportion of gross advances at fixed rates decreased for the first time in nine quarters falling to 82.2% in the fourth quarter from 82.6% in the previous quarter. The quarter three out turn was highest since the figures began at the beginning of 2007. The value of residential loans advanced to first time buyers decreased over the quarter to £11.2 billion from £12.1 billion in the previous quarter and the third quarter out turn was the highest since the third quarter of 2007. Buy to let (BTL) lending increased from £6.6 billion in the fourth quarter of 2013 to £7.6 billion in the fourth quarter of 2014 and the proportion of gross advances at an LTV over 90% decreased by 0.5% over the quarter to 3.8% in the fourth quarter of 2014. The figures show overall that the lending landscape has been extensively reshaped over the past year, according to Adrian Gill, director of Your Move and Reeds Rains estate agents. ‘Fresh regulations and affordability checks have cultivated a much healthier mortgage market. Mortgage approvals may take longer to come to fruition, but buyers are benefiting from a more thorough and considered borrowing process,’ he explained. He believes that in the longer term, providing customers with the most suitable mortgage product for their needs is of paramount importance at a time when front-end demand is beginning to blossom in 2015, as consumer confidence grows. ‘Slashed stamp duty fees and more gradual house price growth are bringing homeownership closer within reach of aspiring buyers, while at the same time rock bottom inflation and competitive mortgage deals are giving borrowers a boost,’ he pointed out. ‘Buyers are finding brilliant deals on homes, and this front-end sales activity will soon trickle down to completions, feeding the property recovery,’ he added. Continue reading →
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