“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.”
UK mortgage lending 28% higher year-on-year
Growth in mortgage lending continues to rise in the UK, according to new figures released by the Council of Mortgage Lenders (CML) today.
The CML Regulated Mortgage Survey for all home-owner mortgage data reveals that UK mortgage lending in August this year was an estimated at GBP16.4bn. Although this figure is 2% less than gross lending total of GBP16.7bn in July 2013, it is 28% higher than a total of GBP13bn in August 2013.
Members of the CML include banks, building societies and other lenders who collectively provide approximately 95% of all residential mortgage lending in the UK. UK loans are currently worth over GBP1.2tn and cover 11.3 million mortgages.
According to the CML data, the profile of lending in August shows that total home-owner house purchase lending rose by 15% on August last year. A total of 27,100 loans were taken out by first-time buyers in August 2013, an increase of 33% over August 2012. Loans for home movers amounted to 34,200 loans, a rise of 5% on the previous year. Re-mortgages for home-owners was slightly down in august when compared to the previous month, however it was increased by almost 11% up on August 2012.
Buy-to-let loans were slightly lower in August this year, with a total of 14,900 loans valued at GBP1.9bn, in comparison to 15,200 buy-to-let loans made in July. Lending for buy-to-let re-mortgages dropped to 6,900 loans in August from 7,200 loans in July.
The upward trend in lending activity saw first-time buyers borrowing more in relation to income in August, with 3.36 times borrower income. This is higher when compared to July this year, with 3.31 times borrower income. However, total mortgage payments have remained low relative to income as a result of lower mortgage interest rates. A typical first-time buyer mortgage payment represented 19.3% of income in August 2013. Also, a record high of 86% of borrowers opted for fixed rate mortgages.
Director general of the CML, Paul Smee, said: