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Strong recovery in lending to second steppers

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Fri 18 Sep 2015

Strong recovery in lending to second steppers

 

Gross mortgage lending to second steppers and home movers rose strongly in July, to its highest level since October 2007, according to figures from the Council of Mortgage Lenders.

The data indicates that the whole market is starting to move with UK gross lending in July totalling £21.7bn, up 8% on June and 12% up on July last year.

Overall in July the value of home-owner loans for house purchase hit £7.6bn and accounted for 56% of gross lending for purchase while re-mortgage activity, at £5.1bn, accounted for 24% of total lending.

Gross lending to first-time buyers was £4.6bn up 7% from 12 months previous and 5% from June.

The rise in the number of loans for house purchase in July was driven by both first-time buyers and home-movers. However, the increase in volume and value terms for home movers was much stronger than for first-time buyers.

This was the highest monthly lending level by volume since November 2007, and by value the highest monthly level since October 2007.

Buy-to-let lending for house purchase has showed stronger growth than home-owner loans for house purchase for most of the year, representing 18% of gross lending in July.

Overall, buy-to-let lending rose sharply in July, increasing both month-on-month and year-on-year by volume and by value for the third consecutive month in a row.

While buy-to-let house purchase rose 33% year-on-year to £1.6bn, buy-to-let remortgage activity rose a whopping 69% over the 12 months to July, hitting £2.2bn.

Paul Smee, director general of the CML, said: "The market has shown steady growth in house purchase and buy-to-let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market.

 

"This positive direction of travel going into the autumn months reinforces our recent revised forecasts that lending levels should continue to grow gradually over the rest of the year after a subdued beginning of the year.