House pur­chase lend­ing up 22% in June

The Oban Times - - Property -

House pur­chase lend­ing in the UK in June saw a sub­stan­tial month- on- month in­crease in ac­tiv­ity with over 20 per cent more loans be­ing ad­vanced to pur­chase a house com­pared to May. How­ever, the num­ber of loans and value for home- owner house pur­chase re­mained rel­a­tively steady com­pared to June last year, with the num­ber of loans de­creas­ing slightly but the amount bor­rowed in­creas­ing. There was a rel­a­tively sim­i­lar trend in ac­tiv­ity for home- owner house pur­chase in the sec­ond quar­ter over­all.

The rise in the num­ber of loans for house pur­chase in June was driven by both first-time buy­ers and home- movers. The in­crease in the two ar­eas was broadly the same in value and vol­ume terms.

As pre­vi­ously re­ported, gross lend­ing in June to­talled £ 20.1bn, up 25 per cent on May and 13 per cent up on June last year. This meant in the sec­ond quar­ter, gross lend­ing came to £52.2bn, up 17 per cent on the pre­vi­ous quar­ter and a two per cent rise on the sec­ond quar­ter 2014.

Over­all in June, the value of home- owner loans for house pur­chase ac­counted for 54 per cent of gross lend­ing, while re­mort­gage ac­tiv­ity ac­counted for 25 per cent. Buy-to- let as a pro­por­tion of to­tal lend­ing re­mained at around 17 per cent but still makes up a larger por­tion of to­tal lend­ing com­pared to the same time last year.

Com­pet­i­tive mort­gage rates mean first-time buy­ers are pay­ing a record low pro­por­tion of their monthly house­hold in­come in June to ser­vice the cap­i­tal and in­ter­est rate pay­ments of their mort­gage. This is the low­est level since the CML be­gan track­ing it in 2005.

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