Lending for house purchase continues to recover
Published: 16 July 2014 | Author: Bernard Clarke
Lending for house purchase rose in May, continuing a pattern of steady recovery from its low point in 2009.
Lenders advanced 57,900 mortgages to fund house purchase during the month, up 9% from the number in April. Year-on-year, the total was up 13%, and the value of lending was 25% higher.
Chart One: Number of loans for home-owner house purchase per month
First-time buyer activity grew more strongly than borrowing by movers, although both showed solid year-on-year growth. Lenders advanced 26,800 mortgages to first-time buyers in May, worth £3.9 billion – up 19% by volume and 30% by value on May 2013. Movers took out 31,100 mortgages, worth £5.7 billion, which represented a year-on-year increase of 9% by volume and 21% by value.
However, our figures showed that remortgaging continued to decline. Lenders advanced 21,600 loans for remortgaging in May, worth £3.3 billion. That represented a decline of 26% by volume and 15% by value, compared to a year earlier.
Our data for May was the first to show lending activity following the introduction of the mortgage market review (MMR), and there was no evidence of a "cliff edge" effect on the market. Lenders and intermediaries had been working methodically towards applying the new rules in the months leading up to the April 26 deadline, and the lending figures appear do not appear to show any significant impact of the transition to the new regime.