MortgagesJul 7 2015

Residential and BTL lending hits highs: Equifax

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Residential and BTL lending hits highs: Equifax

Both residential (£11.1bn) and buy-to-let lending (£3.4bn) in May were higher than in April, up 2 per cent and 7.8 per cent respectively, according to Equifax Touchstone analysis.

This is a combined 3.3 per cent (£470m) increase in sales volumes month-on-month, while the average value of each mortgage in May was £183,454 for residential, up from £176,361 in May 2014, and £155,916 for buy-to-let from £152,936 last year.

May 2015 was the second highest month in terms of mortgage lending volumes in the last eight years, according to the market intelligence firm, only beaten by March when lending volumes reached £15bn.

The data covers 92 per cent of the intermediated lending market, showing that when compared to May 2014, residential mortgage sales were up by 10.6 per cent (£1.1bn) and buy-to-let increased 26.5 per cent (£710m), a combined increase of 14 per cent year-on-year.

Looking at year-to-date comparisons between 2015 and 2014, residential sales were up 7.2 per cent (£3bn). When added to the buy-to-let sales growth at 23.4 per cent (£2.8bn), the total market has grown by £6.22bn (10.54 per cent) in 12 months.

Iain Hill, relationship manager at Equifax Touchstone, said that after the slight sales decline reported in April and with the uncertainty created by the election, it remains to be seen whether the market will continue to surge over the summer.

“An increase in lending volumes of £710m year-on-year shows a dramatic rise in the popularity of buy-to-let mortgages as retirees unlock pension pot capital and invest in property to generate income.”

Late last month, the Council of Mortgage Lenders suggested that the housing market can expect an upturn in lending over the coming months, with economist Mohammad Jamei stating that forward indicators of lending, such as Bank of England data on approvals, show a modest recovery on the horizon.

peter.walker@ft.com