First-time buyers, home movers, home-owner remortgage and buy-to-let all saw a monthly lending decline in August, but an uptick compared to the same time last year, according to the latest Council of Mortgage Lenders figures.
This is a normal seasonal trend, with August typically less strong for mortgage completions, according to the CML, with an underlying picture of improvement in lending levels year-by-year.
Chief economist Bob Pannell stated: “Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year-on-year growth, and we expect this to continue over the coming months.”
The statistics showed that for home-owner loans, remortgaging of £4.2bn was down 18 per cent month-on-month, but up 20 per cent year-on-year. The same amount of lending was registered for first-time buyers, which put it down 11 per cent from July, but up 5 per cent from last August.
There was £7.1bn worth of home mover loans made in August, down 7 per cent from the previous month, but up 8 per cent from the previous year.
As for buy-to-let, there was £1.9bn worth of remortgaging activity - down 14 per cent from July, but up a whopping 73 per cent from last August - and £1.4bn of house purchase lending - down 13 per cent month-on-month, but up 40 per cent year-on-year.
The CML stated that buy-to-let lending for house purchase has showed stronger year-on-year growth than home-owner loans for house purchase for most of the year, which in part is a market recovery response, as buy-to-let lending declined more than home-owner lending during the downturn.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented that indicators are good for the rest of the year, with September proving to be very busy.
“Buy-to-let lending saw considerable year-on-year increases and the attraction of the sector is undiminished, even if landlords may think twice in the future before investing to ensure the numbers add up.
“With first-time buyers accounting for 44 per cent of total lending volumes, a much higher proportion than pre-crisis levels of 30 per cent, the trend for lenders to offer higher loan-to-value mortgages continues.”
Frank Speir, director of buying agency Prime Purchase, said: “Buyers will pay the asking price if they have a justifiable reason for doing so, but stagnation in the market is giving buyers the opportunity to use the stamp duty changes as an excuse.
“The problem is that with very little stock coming onto the market there isn’t the comparable evidence that we would normally expect to see.”