13 Nov

Home lending on the rise

Home lending on the rise

Lending for home buying has reached its highest quarterly level since 2007, according to new figures.

Data from the Council of Mortgage Lenders (CML) shows that there has been a rise in the value of home loans, but some sections of the market remain weaker than others.

There was a decline in the amount of lending to first-time buyers over the past few months. However, levels remain 25 per cent higher than September 2013.

Affordability for first-time buyers did improve slightly, with those stepping on to the property ladder borrowing 3.4 times their gross income, compared to 3.42 in August.

This means the typical loan size for first-time buyers increased to £125,999 in September, up from £125,375 in the previous month.

There was a decline in the total amount lent to those moving home. In September, the CML figures showed the number of loans granted was 31,700, ten per cent lower than in the previous month - but 11 per cent higher than in September last year.

Overall, lending to movers totalled £6 billion - 12 per cent less than the previous month, but still substantially higher than September 2013 levels.

In terms of remortgaging, there was a strong increase in September of 20 per cent compared to August. Total value of the loans granted was £4.4 billion, however, this was six per cent less than in September last year.

"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 is 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.

CML's data also showed there were 18,100 buy-to-let loans taken out in September - equalling £2.5 billion - a figure 32 per cent higher than the same point in 2013.
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