Mortgages  

Mortgage market recovery driven by FTBs: CML

Some 21,700 mortgages were taken out by first-time buyers during November 2012, totalling £2.7bn and representing a 24 per cent rise on November 2011 figures, and an 8 per cent rise on October figures.

The average loan-to-value was 80 per cent. The CML data also shows that home-movers helped contribute to an increase in lending, with 31,100 loans approved worth £5bn in November, a year-on-year rise of 6.1 per cent compared with November 2011 and an improvement of 5.4 per cent on October.

Total house purchase lending also grew during November, up 12.6 per cent to a total of 52,700 loans, worth £7.7bn, while estimated CML gross lending figures for the whole of 2012 rose from £141bn in 2011 to £143bn.

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With commentators pointing to signs of recovery within the mortgage market and CML forecasts for gross lending reaching £156bn this year, the council’s chief economist Bob Pannell said: “We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.

“A key reason is that lenders currently face few funding pressures, in part reflecting the Funding for Lending Scheme. House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months.”

Meanwhile, data from the Office for National Statistics’s monthly house price index revealed that UK house prices had grown by 2.1 in the 12 months up to October, driven by a 5 per cent increase in London and the Southeast of England.

David Brown, commercial director of provider LSL Property Services said: “2012 as a whole was a year of steady improvement. To build on that progress in 2013, and match the CML’s optimistic forecast for the year, lenders will need to do even more to unlock the demand from frustrated first-time buyers who haven’t yet felt the full benefits of the Funding for Lending Scheme.”

Adviser view

Brian Murphy, head of lending at national advisory firm Mortgage Advice Bureau said: “The figures from the CML certainly point to a stable momentum in the marketplace that should carry mortgage lending to greater heights in 2013.

“Finishing the year with a total of £143bn may be a modest improvement on 2011, but what matters most is that the conditions are now in place to make a significantly bigger leap over the next 12 months.”

Statistics:

£7.7bn – total loan value in November

£143bn – total loan figures for 2012