Posts with tag: Mortgage lending

Mortgage Lending rises in Q3 of 2015

Published On: November 11, 2015 at 12:20 pm

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Mortgage lending is rising and is in the middle of an, ‘upward trajectory,’ according to the latest report from the Council of Mortgage Lenders.

After a slow start to 2015, lending to first-time buyers and home movers increased during the third quarter of the year, in comparison to the second. In addition, there was also an annual rise from the same period twelve months ago.

Low rates

A lot of borrowers are seeing the benefits of low costs, due to the continuing record low in the Bank Rate. Mark Harris, chief executive of mortgage broker SPF Private Clients, said that,’ with summer out of the way, lenders have an eye on year-end targets and with the Bank of England hinting that interest rates might not rise next year, there are some very competitive deals to tempt borrowers.’[1]

The Council of Mortgage Lenders stated that gross mortgage lending amounted to £61.4bn during the third quarter of 2015. This was a rise of 18% on the previous quarter and a 12% rise on the same period in 2014.

In addition, the value of homeowner loans for property purchases made up 57% of gross lending. Remortgage activity made up 24%, with buy-to-let accounting for 18%.

Pick up

‘After a slight lull in August, monthly mortgage lending picked back up in September,’ said Brian Murphy, Head of Lending at the Mortgage Advice Bureau. ‘Lending is now at similar levels to those seen in June and July, which represented a post-recession high. Remortgage lending had a significant role to play in this growth, with both the volume and value of remortgage loans up substantially month-on-month. In contrast, the value of loans for house purchases saw a slight decline while the volume remained static,’ he continued.[2]

Mortgage Lending rises in Q3 of 2015

Mortgage Lending rises in Q3 of 2015

Paul Smee, Director General of the Council of Mortgage Lenders, also noted that, ‘the market was a slow starter this year, but this quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.’[2]

‘Buy-to-let continues its growth this period, but at 18% of new lending in September remains the fourth largest lending type behind first-time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession,’ he concluded.[2]

Buy-to-let increases

Andrew Turner, director at Commercial Trust, echoed the positive sentiment surrounding buy-to-let lending. Turner said, ‘It is positive to learn that during September, gross lending of buy-to-let, buy-to-let house purchasing and buy-to-let mortgaging have all seen strong increases from the same time the previous year, indicating favourable lending conditions across all tenures.’

‘It is clear that buy-to-let is continuing to show real improvement, growing far more quickly than any other type of lending and continuing its trend of being the strongest UK mortgage market in the years since the recession. Though the bulk  of both gross activity and yearly growth was remortgage loans, property purchase loans have also seen a more than modest climb – despite the continuously changing legislative environment in which landlords operate and the threat of increased buy to let regulation, both from pan-European legislation and the Bank of England itself.’[2]

Turner concluded by warning against a return to previous lending conditions. He noted that, ‘if the past few years have shown us anything, it is that buy-to-let has been the biggest driver of the housing market recovery and instrumental in servicing the housing needs of the UK. Whilst it is crucial that we do not return to the risky lending conditions seen prior to the recession, it is equally crucial that we do not stifle landlords’ ability to continue to invest and provide homes we desperately need.’[2]

[1] http://www.bbc.co.uk/news/business-34786105

[2] http://www.propertyreporter.co.uk/finance/18-rise-in-lending-sees-market-moving-in-right-direction.html

 

Mortgage Lending Up £3.4bn in One Month

Published On: September 30, 2015 at 3:58 pm

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Mortgage lending has risen by the greatest level since 2008, according to official data from the Bank of England (BoE).

Mortgage Lending Up £3.4bn in One Month

Mortgage Lending Up £3.4bn in One Month

In August, 71,030 loans were approved for home purchases – the highest monthly figure for 19 months and up by 20% on levels recorded as recently as November 2014.

The Bank announced that total net mortgage lending grew by £3.4 billion in August, compared with the £2.8 billion rise in July – the highest number since May 2008.

The report arrives after the Land Registry revealed that the average house price in England and Wales increased by 0.5% in August to £184,682.

And the rise in mortgage lending follows a price war between lenders, causing rates to drop to record lows. Homebuyers are also rushing to secure competitive mortgage rates before interest rates start rising.

Chief Executive of the Royal Bank of Scotland (RBS), Ross McEwan, says customers are moving from standard variable rates (SVRs) “because they are frightened of interest rates going up”1.

Most consumers are moving onto two or five-year fixed rates, with SVR mortgages accounting for 18% of the bank’s mortgage lending, compared with 25% a year ago.

UK Economist at IHS Global Insight, Howard Archer, says the latest data provides “more compelling evidence that housing market activity is on the up”. He adds: “Stronger buy-to-let activity is also pushing up mortgage approvals.”

Archer now expects house prices to end the year 7% higher than at the start, and to rise by a further 6% in 2016. He explains why: “Higher interest rates are unlikely to have a major dampening impact on housing activity for some time to come, as the BoE is stressing that interest rates will only rise gradually and to a limited extent.”1

Head of Lending at the Mortgage Advice Bureau (MAB), Brian Murphy, believes there are “no signs of a summer slowdown” in the mortgage market.

He concludes: “The remortgage market in particular has experienced a burst of activity, with approvals for remortgage rising more than twice as fast as those for house purchase year-on-year.”1

1 http://www.theguardian.com/money/2015/sep/29/mortgage-lending-hits-19-month-high

 

 

 

 

Mortgage Lending Rises £2bn in One Month

Published On: September 28, 2015 at 8:48 am

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Mortgage Lending Rises £2bn in One Month

Mortgage Lending Rises £2bn in One Month

Mortgage lending grew by £2 billion in August alone, the biggest monthly increase in five years, according to the British Bankers’ Association (BBA).

Approvals soared by 23% annually, while remortgaging rose by 38% to its highest level since 2011.

Chief Economist at the BBA, Richard Woolhouse, explains: “People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain.

“Remortgaging numbers also continue to be strong, as shrewd homeowners snap up competitive deals.”1

Last month, a total of £12.2 billion was lent to home movers and buyers, a yearly increase of 14%.

1 Unknown (2015) ‘Borrowers drive mortgage lending up £2bn in a month’, Metro, 25 September, p.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage lending at seven-year high

Published On: September 25, 2015 at 3:11 pm

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Mortgage lending rose to a seven-year high during August, as buyers and remortgagers came back into the market.

According to data from the British Bankers’ Association, a total of £12.2bn was advanced during the month. This was the highest since August 2008.

Highs

Net lending also reached a five-year high of £1.96bn, but mortgage advances have had a slow start to the year, staying around the £500m per month mark.

However, advances did begin to rise in May, after the uncertainty surrounding the General Election was dispelled. Indeed, the market looks strong moving forwards, with total number of mortgages approved increasing across all categories.

The number of loans for people looking to remortgage rose to 25,540 in August, which was the highest level for four years. What’s more, this was 38% above the figure for the same period of 2014. This surge was attributed to people taking out fixed rate mortgage deals in order to maintain control over their monthly repayments, once the Bank Rate does eventually rise.[1]

Mortgage approvals for house purchases only rose, by 16% in comparison to August 2014 to stand at 46,743, the highest level since February last year.

Mortgage lending at seven-year high

Mortgage lending at seven-year high

Lack of supply

RICS feels that the number of homes on the market stayed at an all-time low during August, with the ongoing shortage of stock stalling the recovery in transaction volumes.

‘People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain,’ said Richard Woolhouse, chief economist at the British Bankers’ Association.[1]

Woolhouse believes that, ‘mortgage borrowing continues to pick up,’ and. ‘the August increase is the largest in five years, although borrowing is still some way below pre-crisis levels. Remortgaging numbers also continue to be strong, as shrewd homeowners snap up competitive deals.’[1]

[1] http://www.zoopla.co.uk/discover/property-news/mortgage-lending-takes-off-after-general-election-24-09-15/?utm_content=bufferce5d9&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#Ovgsfv1kgv4DfSK8.97

 

Mortgage Lending Highest Since Financial Crash

Published On: September 16, 2015 at 11:50 am

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Mortgage Lending Highest Since Financial Crash

Mortgage Lending Highest Since Financial Crash

Mortgage lending for home purchases grew in July, according to lenders. Lending to first time buyers and home movers was the highest since the financial crash.

In total, 67,800 home purchase loans were advanced, up from 63,100 in June and from 64,700 in July last year.

It was the third consecutive month of growth by volume and value.

By value, lending to first time buyers rose by 7% annually and 5% on a monthly basis.

30,200 loans were granted, up from 29,400 in June and 28,900 in July 2014.

By volume and value, this was the highest level of lending to first timers since August 2007.

Furthermore, 37,700 mortgages were given to home movers in July, the highest level by volume since December 2009 and the highest by value since November 2007.

This data compares with 25,200 loans for buy-to-let, around half of which – 11,800 – were for property purchase and the rest for remortgage.

Remortgaging by homeowners dropped slightly, by 4.4% on the month, but up by a huge 34% annually, the highest of all loans.

The value of remortgages was £5.1 billion in July, higher than that for home purchase and first time buyers.

Mortgage Lending Rises

Published On: September 9, 2015 at 10:58 am

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The amount of residential mortgage funds lent has risen by over 10% in the past year, according to new research.

Mortgage Lending Rises

Mortgage Lending Rises

The amount approved for residential mortgages in the second quarter (Q2) of 2015 was £59.3 billion, up from £47.2 billion in Q1 and an 11% increase over the year.

The Bank of England (BoE) and the Financial Conduct Authority (FCA) released this data yesterday.

In total, 15.1% more was lent in Q2 this year than Q1.

The study also found that there were 200,273 house purchases in Q2 and a further 68,764 in July.

The amount of money lent for buy-to-let purposes also rose annually, up from £7 billion in Q2 2014 to £8.3 billion in Q2 this year.

Overall, the amount of residential loan money outstanding was £1.272 billion in Q2, up 0.8% on Q1 and a 1.8% yearly increase.

The proportion of funds lent at fixed rates grew from 77.6% in Q1 to 78.9% in Q2. The average interest rate on this money was down from 2.99% in Q1 to 2.83% in Q2 – the lowest rate since the BoE/FCA records began in 2007.

The value of residential loans approved for first time buyers rose over the quarter, from £8.9 billion in Q1 to £10.8 billion in Q2.

However, this is slightly down on the amount lent to first time buyers in Q2 2014, when it totalled £11.4 billion.