Mortgage lending hit an eight-year high in August as the housing market continued to recover, figures showed today.
A total of £20bn was advanced during the month, the highest total for August since 2007, and 12 per cent above the amount lent in the same month of 2014, according to the Council of Mortgage Lenders (CML).
But there was a slight dip in lending levels compared with the previous month, when £21.7bn was advanced, as the market experienced its traditional August lull.
Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.
“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.
“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”
The mortgage market is currently enjoying a boost from the return of both buyers and existing homeowners who are remortgaging.
Many potential buyers, who sat on their hands due to the uncertainty caused in the run up to May’s General Election, have since returned to the market.
At the same time, there has been a surge in the number of people remortgaging following warnings by Bank of England Governor Mark Carney that interest rates could start rising at the turn of the year.
Figures released by the CML earlier in the week showed a 34 per cent year-on-year jump in the number of people switching loans as homeowners look to lock into the current competitive rates on offer.
The group pointed out that remortgage and buy-to-let lending was improving more strongly than advances to people buying their own home.
A recovery in sales levels is being constrained by a shortage of homes on the market, which is continuing to put upward pressure on prices.
The Royal Institution of Chartered Surveyors (RICS) recently warned that while new buyer enquiries increased for the fifth month in a row in August, the number of homes being put up for sale remained at record low levels.
Affordability pressures are also likely to be having an impact on transaction volumes.
The average UK home currently costs 5.34 times average earnings, according to mortgage lender Halifax.
A total of £20bn was advanced during the month, the highest total for August since 2007, and 12 per cent above the amount lent in the same month of 2014, according to the Council of Mortgage Lenders (CML).
But there was a slight dip in lending levels compared with the previous month, when £21.7bn was advanced, as the market experienced its traditional August lull.
Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.
“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.
“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”
The mortgage market is currently enjoying a boost from the return of both buyers and existing homeowners who are remortgaging.
Many potential buyers, who sat on their hands due to the uncertainty caused in the run up to May’s General Election, have since returned to the market.
At the same time, there has been a surge in the number of people remortgaging following warnings by Bank of England Governor Mark Carney that interest rates could start rising at the turn of the year.
Figures released by the CML earlier in the week showed a 34 per cent year-on-year jump in the number of people switching loans as homeowners look to lock into the current competitive rates on offer.
The group pointed out that remortgage and buy-to-let lending was improving more strongly than advances to people buying their own home.
A recovery in sales levels is being constrained by a shortage of homes on the market, which is continuing to put upward pressure on prices.
The Royal Institution of Chartered Surveyors (RICS) recently warned that while new buyer enquiries increased for the fifth month in a row in August, the number of homes being put up for sale remained at record low levels.
Affordability pressures are also likely to be having an impact on transaction volumes.
The average UK home currently costs 5.34 times average earnings, according to mortgage lender Halifax.
This is the highest level since March 2008, shortly after the housing market correction began.
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