You are here: Home - News -

Mortgage lending rises in June boosted by remortgages – UK Finance

  • 25/07/2018
  • 0
Mortgage lending rises in June boosted by remortgages – UK Finance
Gross mortgage lending for the total market in June is 2.1% higher than a year earlier at £23.5bn, data showed.


However, the number of mortgage approvals by the main high street banks in June fell by 2.1% compared to the same month a year earlier, according to the latest report from UK Finance.

Within this only remortgaging approvals increased, but was offset by the 4.7% fall in house purchase approvals and 4.3% fall in other secured borrowing.

Commenting on the data, Eric Leenders, managing director, personal finance at UK Finance said: “Lending to households has continued to grow modestly in line with recent trends, with increased borrowing on credit cards mirrored by a fall in overdraft borrowing.

“Meanwhile growth in mortgage lending continues to be driven by remortgaging, as borrowers take advantage of attractive deals ahead of an anticipated Bank rate rise.”

Jeff Knight, director of marketing at Foundation Home Loans, added: “Predictions for an August rate rise may have dampened slightly, with inflation stalling and house prices rising at the slowest pace for five years last month.

“Where this might impact those who were hopeful to bag competitive mortgage deals before the rise, activity from homeowners remortgaging should help maintain overall market activity.”

John Goodall, CEO of buy-to-let specialist at Landbay, said: “June was yet another strong month for gross mortgage lending.

“While overall lending grew, we cannot ignore subdued activity among home movers. Rising house prices and substantial stamp duty costs have stumbled the market and sales remain significantly low.

“All eyes are now on the new housing minister to offer a long term plan for growth in the market, including concrete plans for greater construction to enhance affordability and encourage movement in the market.”


First-time buyer affordability

Prospective first-time home buyers in London in 2017 could expect to spend 13 times their earnings on property, compared with 5.5 times in the North East, separate research found.

London was the least affordable region for prospective first-time buyers in 14 of the last 19 years, with the North East the most affordable for 18 of the last 19 years, according to the Office for National Statistics report.

Housing became less affordable for those who bought their first house in 78% of local authorities in 2017 compared with the previous year.

Ross Boyd, founder of the ‘always-on’ mortgage platform, Dashly, said: “For first-time buyers in London, the number 13 certainly symbolises bad luck. To have to spend 13 times your earnings simply to get on the first rung of the property ladder is borderline obscene.

“While average UK house price growth has been slowing for some time now, the sheer lack of supply means prices are being propped up and that’s contributing to the continued lack of affordability in certain areas of the country.

“The government is doing its level best to help first time buyers but the hurdle of historical house price growth has become almost insurmountable.

“While first-time buyers are active, and mortgages very competitive even at higher loan to values, affordability in some areas of the country is simply unachievable due to house price levels.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in