UK Mortgage lending hits two-year high

Monday, October 15, 2012. Ivan Radford @themovechannel

Mortgage lending to UK house-buyers has hit a two-year high, suggesting that the recent introduction of schemes, such as NewBuy, designed to boost the housing market, are proving successful.

Mortgage lending to UK house-buyers has hit a two-year high, suggesting that the recent introduction of schemes, such as NewBuy, designed to boost the housing market, are proving successful.

According to the Council of Mortgage Lenders (CML), about 55,300 home loans were advanced for a residential property purchase in August worth £8.4bn, representing an 11% rise compared to the same month last year and the largest number of loans seen since July 2010.

Mortgage lending to first-time buyers looking to buy property in the UK is up by a fifth on a year ago with £2.8bn worth of loans advanced, only just below the levels seen in March when the ending of a stamp duty concession for this sector prompted a rush of people looking to complete deals.

The typical first-time buyer deposit has stood at 19% since July, the lowest average deposit for this sector in more than three years, the CML said.

The CML said that it was too early to say whether the boost in home loans is the start of an ongoing trend or if it is down to the market re-adjusting after summer distractions such as the Olympics.

Jonathan Harris, director of mortgage broker Anderson Harris, said the figures showed "welcome indications" that funding for lending is starting to kick in, with several lenders slashing their rates recently.

"With first-time buyers still needing to put down nearly 20% of the purchase price as a deposit, we need funding for lending to result in more options and better rates at higher LTVs (loans-to-value) if it is to make a real difference for the market."

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Author - Dan Johnson

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