According to the latest ‘Money and Credit’ statistical release from the Bank of England, mortgage lending increased by £0.9bn in April, compared to the average monthly increase of £0.6 billion over the previous six months.
The three-month annualised and twelve-month growth rates were 0.7% and 0.5% respectively. Gross mortgage was £13.0 billion and repayments were £12.5 billion.
The number of loan approvals for house purchase was 53,710 in April, compared to the average of 53,729 over the previous six months. The number of approvals for remortgaging was 30,313 compared to the average of 28,323 over the previous six months. The number of approvals for other purposes was 12,580 compared to the average of 13,900 over the previous six months.
Ashley Brown, director of the independent mortgage broker Moneysprite, said:
“The rise in lending in April was not a quantum leap but it’s still further proof that the property market is now on firmer ground and people feel more confident about making purchases. A bonanza of cheaper mortgage deals is certainly helping tempt buyers back to the market.
“It didn’t seem that long ago that all the headlines were about the first lender to drop its five year fixed rate mortgage below 3%. Now there are a whole host of lenders offering five year fixed rates under 3%, and we recently saw five year deals crash through the 2.5% mark. The rise in first time buyer numbers, the heart beat of the property market, has been particularly encouraging.
“They have been frustratingly sitting on the side lines, unable to enjoy the cheaper deals being churned out by lenders, because they couldn’t cover the deposits. Now we’re seeing a lot more activity at the higher loan to value end of the market as lenders scrap around to gain market share. It doesn’t mean the bad times are behind us, so roll on the good times.
“Cheap money from the Funding for Lending Scheme won’t last forever, and rates could start going up just as quickly as they have dropped if lenders are faced with higher wholesale lending costs. There is clearly an appetite for mortgages, and lenders are open for business across the board, but this is a time for cautious optimism rather than reckless abandon.”
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