FTB borrowing recovering from end of tax holiday: CML
Mortgage lending, which slumped following the abolition of the stamp-duty holiday for first-time buyers, has recovered substantially, the Council of Mortgage Lenders has said.
Data from the CML revealed the average value of house purchase loans grew to £7.2bn in May, up by 36 per on April, and 29 per cent compared to last May.
The number of loans taken out also increased in May, rising by 33 per cent against April to 48,300, and by 24 per cent compared to May 2011.
The CML said that remortgage lending had also risen, from £3.1bn in April to £3.5bn in May.
Some £2.3bn worth of loans were advanced to first-time buyers during May 2012, a rise of 43 per cent compared to the previous month and by 22 per cent on May 2011.
Average loans taken out came to £104,000, up from £97,750 in April, at an average of 3.12 times the borrower’s income.
CML director general Paul Smee said the end of the post-stamp duty holiday slump was “positive news for the market”, but added that uncertainty with the eurozone was still present, which could affect the supply of mortgage lending and consumer confidence.
Charles Haresnape, managing director of Aldermore Residential Mortgages, said: “It’s good news that ending the stamp duty concession appears not to have held first-time buyers back permanently, but they still need as much support as possible. It will be good to see more lenders participating in NewBuy and offering schemes to help borrowers who are struggling to find a deposit.”
Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “MAB’s own figures for May reflect those released by the CML. However, we expect external factors to play a major part in activity levels in the next few months, with activity levels to continue to fluctuate.”
Mr Murphy added that while he welcomed the lending initiatives announced earlier by the Bank of England aimed at stimulating lending to businesses and consumers, he said he hoped this would feed through quickly to mortgage lending in the form of greater product choice and competitive rates.
David Pye, principal of Scottish Borders-based Meldon Independent, said: “I think there is a bit of a lag on these figures. We were very busy with mortgage advances in the spring but it’s now starting to quieten.
“Despite these figures being positive I can’t see where growth is going to come from. We have an uncertain economy, especially on the jobs front, and the problem is accentuated by a lack of deposits and suitable mortgage products.”