House purchase lending up 22% in June
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.