The number of loans advanced to first-time buyers and home movers fell between July and August this year, data from the Council for Mortgage Lenders has claimed.
The CML said the fall was the first month-on-month drop in house purchase lending volume since February this year.
First-time buyer lending fell 4 per cent from July, but year-on-year, it was 9 per cent up on August 2013. By value, there was £4.4bn of lending to first-time buyers, which was 4 per cent down on July but 22 per cent higher than August last year.
The number of loans advanced to movers totalled 36,500, a 3 per cent fall on the previous month but up 7 per cent on August last year.
Remortgaging also fell month-on-month and year-on-year in August. It was 4 per cent down on July and 11 per cent down on the same month last year.
Brian Murphy, head of lending for national firm the Mortgage Advice Bureau, said the brakes were starting to be applied to what once seemed a “rocketing housing market”.
He added: “Although the market appears to be easing, lenders must remain dedicated to their participation in government schemes such as Help to Buy and higher loan-to-value lending.
“Crucially, the ongoing imbalance between housing supply and demand must also be addressed if we are to help suitable borrowers get a foot on the property ladder.”
As lending levels started to tail off, Halifax’s house price index revealed that the price of the average home in the UK continued to rise. According to the data, the average UK home increased £16,257 to £187,188 over the year ending September 2014.
| UK House prices | September 2014 (seasonally adjusted) |
| Annual change | 9.60% |
| Quarterly change | 2.70% |
| Monthly change | 0.60% |
| Average Price | £187,188 |
Adviser view
Mark Harris, chief executive of London-based mortgage broker SPF Private Clients, said: “Lending dipped on all fronts in August compared with July, as one would expect for this time of year, but we had one of our best months ever for new business – emphasising the continued underlying strength of the London property market in particular.
“It is curious why remortgaging remains weak given the historically cheap rates available. As these are not proving enough of a draw, it is unlikely that numbers will flock to remortgage until an interest rate rise is imminent.”
