Home lending in UK reaches highest quarterly level for seven years

Taylor Scott International News

Lending for home buying in the UK has reached its highest quarterly level since 2007, according to the latest data from the Council of Mortgage Lenders (CML). However, first time buyers saw a month on month lending decline for the second month in a row, down 3% compared to August, but still 16% up on September 2013. By value, there was £4 billion advanced to first time buyers in September, 2% down on August but 25% higher than September last year. Lending to home movers also weakened month on month for the second month in a row. In September, the number of loans advanced to movers was 31,700, a 10% fall on the previous month but up 11% on September last year. By value, lending to movers totalled £6 billion, 12% down on August but up 18% on September last year. Remortgage lending activity saw an increase month on month in September, with the number of remortgage loans totalling 28,300. This was 20% up on August but 12% down on September last year. The value of these loans at £4.4 billion was up 22% on the previous month but down 6% on September last year. There were 18,100 buy to let loans in September, representing lending of £2.5 billion. Following the August low of 15,700 loans worth £2.2 billion, this returned buy to let lending to levels very similar to July, up 24% by volume and 32% by value on September last year. The data also shows that first time buyer affordability changed fractionally, with first time buyers typically borrowing 3.4 times their gross income, compared to 3.42 in August and the typical loan size for first time buyers rose month on month to £125,999 in September, up from £125,375 in August. Home movers typically borrowed 3.06 times their gross income in September, compared to 3.05 in August. The typical loan size for home movers was £154,800 in September, down from £155,995 in August. The typical gross household income of a home mover was £53,291 in September compared to £54,150 in August. ‘We are approaching the end of 12 months of change, transition and growth. This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges,’ said Paul Smee, director general of the CML. ‘The lending market is healthier than it was a year ago, and set to remain so. Remortgaging has returned as a driver of lending volume in the buy to let sector. But any fears of overheating in the housing market are now dissipating as house purchase lending activity seems to be softening,’ he added. Continue reading →

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