UK mortgage lending jumps 28%

11th October 2013

The re-invigorated UK housing market is continuing to gather momentum as the amount of mortgages taken out has jumped by 28% over the past year according to new figures writes Philip Scott.

The latest numbers from trade body, the Council of Mortgage Lenders (CML) show that gross UK mortgage lending held steady in August, at an estimated £16.4bn, although down by 2% on July’s figure of £16.7bn, it is 28% up on the same period last year at £13bn.

In addition, first-time buyers took out 27,100 loans in August, an increase of 7% on July and of 33% compared to August 2012m, while home movers took out 34,200 loans, an increase of 7% compared to July and up 5% on August last year.

Total buy-to-let loans advanced fell slightly to 14,900 loans in August, compared to 15,200 in July, with a value of £1.9bn and within this 7,900 buy-to-let loans in August were for house purchase, up by 4% compared to July. Overall buy-to-let remortgage lending fell slightly to 6,900 loans in August from 7,200 loans in July.

Paul Smee director general of the CML says: “The healthy growth in all lending areas compared to the same time last year is indicative of more confidence in the market. The high number of borrowers, in particular first-time buyers, opting for fixed rates reflects the attractive pricing currently on products which can provide helpful stability to borrowers for the next few years.”

Dr Howard Archer, chief European & UK economist at IHS Economics & Country Risk says:An improving housing market is supportive to economic activity and growth prospects, while modest house price rises also have some benefits, especially when they are occurring in areas where house prices are still substantially below their peak 2007 levels and a significant number of people are facing negative equity. However, it is vitally important for economic stability and longer-term growth prospects that a new housing price bubble does not emerge.

“While the strength of house price rises in London is becoming an increasing concern and pushing up the overall national increase in house prices, we are currently a long way off from an overall housing market bubble emerging. Indeed, in many areas house prices are still well below their 2007 peak levels and rising only modestly at the moment.”

1 thought on “UK mortgage lending jumps 28%”

  1. Jacob Wadsworth says:

    The rise in mortgage lending only means that the economy is also booming despite the fluctuations in prices. This is good news for UK but I hope it will be consistent for the rest of the world especially since people need decent houses these days. – http://www.mortgagelocators.com/

Leave a Reply

Your email address will not be published. Required fields are marked *