Mortgage lending reaches 27bn as house prices rise
Wed 13 Nov 2013
Mortgage lending to home buyers has hit its highest level since before the financial crisis struck, while house prices have continued to rise.
Figures from the Council of Mortgage Lenders showed that more than 170,000 loans for house purchase were advanced between July and September, worth 27.1 billion, the highest quarterly figure since the end of 2007. Of those, almost 75,000 went to first-time buyers, marking an increase of 16 per cent on the previous three months. Remortgaging also grew by 11 per cent over the same period, while buy-to-let lending was up 16 per cent.
Paul Smee, director-general of the council, said that although first-time buyers werea "key driver" in the first half of 2013, home movers and remortgages were showing renewed strengh, "which puts the market in a good position to continue momentum into the final few months of 2013".
The housing market will no doubt continue to be buoyed by the Government's Help To Buy Scheme. The second phase, in which the treasury is encouraging banks and building societies to lend to buyers with deposits as small as 5 per cent, began last month
RBS and Halifax said this week that they had received 2,384 applications, worth an estimated 365 million, in the first four weeks of the scheme.
Many economists are concernedthat the scheme could push house prices to unsustainable levels, especially in the capital. The Office for National Statistics said yesterday that average house prices in London rose by 9.4 per cent in the year to September. This pushed the average national price up by 3.8 per cent. Pricesin theSouth Eastwere up by 4 per cent, while those in Yorkshire, and the Humber were 3 percent higher, UK house prices increased by 1.4%.
"The London market is singing from a different sheet, with price increases dwarfing those in the rest of the country," said Peter Rollings, chief executive of the estate agency Marsh & Parsons. "This is particularly true in prime London, where over half of all homes are now worth 1 million or above."