The trade body said 21,600 first-time buyer loans were advanced in the month, up 18% on last August, with the value of loans up 21.7% to £2.8bn.
The average loan-to-value ratio was 81%, flat compared to the previous month but up 1% year-on-year. The CML said this LTV level is the highest it has been for three years.
Lending for all house purchase rose 11% in the 12 months to August, with 55,300 loans advanced during the month worth £8.4bn. This was the largest number of loans in a single month since mid-2010.
The CML reported that remortgage loans fell to 21,700 in the month, down 10% on July’s figures and 36.9% year-on-year. Lending in this area was £2.9bn in August, down a third on last year.
Remortgaging made up just 22% of gross lending, well down on the 33% level seen last August.
CML director-general Paul Smee commented: “House purchase lending showed an encouraging rise in August but it’s unclear whether this reflects just the unravelling of previous factors such as the Jubilee and the Olympic Games, or a shift in the underlying picture.
“We will wait and see whether schemes such as Funding for Lending and NewBuy provide a further boost to the market in coming months.”
Jonathan Harris, director at Anderson Harris, added: “It is perhaps surprising that remortgaging was weak in August when there are so many excellent rates now available and lenders such as Santander continue to raise their standard variable rates.
“Is it a case of apathy or simply that people can’t remortgage, even though they would like to, perhaps because their circumstances have changed or the value of their property has fallen so they don’t meet lenders’ loan-to-value requirements?
“With first-time buyers still needing to put down nearly 20 per cent of the purchase price as a deposit, we need Funding for Lending to result in more options and better rates at higher LTVs if it is to make a real difference for the market.”
