Lending from banks continues to increase, with gross mortgage lending hitting £9.7bn in September, £200m more than in August and outpacing the previous six month average by £1bn, data from the British Bankers’ Association has revealed.
The numbers of approvals for house purchase and remortgaging both increased in September, with house purchase levels the highest since December 2009 and remortgaging the highest since October 2011.
Assistance schemes for mortgages are helping first-time buyers and housing chains generally as housing market activity rises.
Yesterday’s (22 October) data, published by the Royal Institution of Chartered Surveyors, showed an increase in housebuilding in every region of the UK for the first time in six years.
The increases, which marked the first time since 2007 that every region has recorded increases simultaneously, demonstrates that a “long-awaited upturn” in the number of new homes being built may finally be underway, according to Rics.
However, it added the country is “not out of the woods yet” as it stressed housebuilding activity is still “way behind” where it needs to be to meet the growing demand and cited anecdotal evidence of skills shortages and materials capacity constraints.
David Dooks, statistics director of the BBA, said: “September’s figures build on the growing picture of improved consumer confidence, with stronger gross mortgage lending, rising house purchase approvals and increased consumer credit.
“Business borrowing rose by £2.5bn net in September, the strongest monthly rise since 2009, reflecting increased demand from wholesalers, retailers and utility companies.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘Consumer confidence continues to improve, with demand for housing strengthening.
“Some buyers are worried about being priced out of the market further, while others are finally convinced that they will be able to get hold of mortgage finance at excellent rates so it’s as good a time as any to take the plunge.
“While money market rates edge up slowly, a number of lenders have reduced their mortgage pricing to attract business and meet year-end targets. We expect this to continue, with some cracking deals available to buyers and those remortgaging over the next couple of months.”