With a total of £19.1bn for July, gross mortgage lending is nearing a six-year high, reveals figures released by the Council of Mortgage Lenders (CML). Did you realise mortgage lending had reached such heights?
The numbers show a 7% hike from June, and a 15% increase compared with July last year, resulting in the highest figure since August 2008. Caroline Offord, a CML analyst, said that the data shows mortgage lending remained healthy, despite the mortgage market review in April having brought in new rules on affordability tests for lenders.
However, she warned that the changes could begin to affect the property market for the second half of the year. “Economic conditions have strengthened, but while the Bank of England has signalled an improved economic outlook since May, headwinds remain,” she said.
Property transactions are also up 25% compared with the same period a year ago. However, Offord noted that the “stress tests”, which certifies that borrowers are not overly susceptible to rises in interest rates, could begin to “dampen” the trajectory.
New mortgage lending for the first part of the year climbed to £10.5bn, which Offord says shows signs of growth, with year totals scarcely exceeding £10bn in the past five years.
These figures come after the Office for National Statistics said on Tuesday that the average price paid by people buying their first property had risen by 10.2% over the 12 months to June. The official figures also show that average house prices in London are almost £500,000 – that’s £235,000 higher than the average for the rest of the UK.
Are you a first-time buyer? If so, have you witnessed a rise in prices?