According to the latest Council of Mortgage Lenders' survey, at £14.5 billion, total gross lending rose significantly for the second month running, but was still 42% lower than in July last year. Within this, house purchase lending accounted for 56,000 loans totalling £7.5 billion - up from 47,000 loans totalling £7.1 billion in July last year. Remortgaging, however, remained unsurprisingly weak. The rise in house purchase lending in July was concentrated more heavily towards home movers than in June, when the largest rise was seen in first-time buyer activity. There were 20,400 first-time buyer loans and 35,700 home mover loans in July, up 18% and 28% respectively on June. But compared with a year earlier, the rise in first-time buyer numbers was higher, up 22% compared with a 17% rise in the number of movers.
In terms of product choice, over three quarters of mortgages taken out in July were at fixed rates, with borrowers able to lock in to an average fixed rate of 4.7%, well below the average of 5.57% over the past decade.
Commenting on the latest survey data, CML economist Paul Samter observed: “It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being. The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet."
