Figures from the Council of Mortgage Lenders (CML) for July showed house purchase lending enjoyed growth for the third month in a row while also rising by 9% compared to the same period last year.
The rise in house purchase loans was driven mostly by home movers, as the number of loans reached 37,700, an increase of 11.9% compared to June and 5.3% a year earlier. The value of loans for home movers continued to rise by 15.2% in June and 10.1% since the same period last year, to total £7.6m.
First-time buyers also contributed to strong growth in July as the volume and value of lending hit the highest level since August 2007. Loans to first-time buyers totalled 30,200, making up 45% of total house purchase lending. The value of loans to first-time buyer increased to £4.6m in July.
Remortgage lending settled down in July, following a sharp rise in activity the previous month. Activity dropped by 6% in volume and 4% in value, but still increased substantially compared to the same period last year, by 26% and 34%, respectively.
Buy-to-let lending for house purchase continued to outstrip homeowner purchase loans, increasing on both a monthly and annual level. The number of loans in July totalled 25,200, but this was mainly driven by strong remortgage figures where loans totalled 13,200, over half of buy-to-let loans for that period.
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.”
