Bank of England data shows a rise in the number of mortgage approvals to 60,275 as lenders bring back low cost mortgages.
Mortgage approvals for first time buyers and home movers increased to 60,275 in December from 58,956 in November according to the Bank of England.
This figure is still 20% lower than the recent high for mortgage approvals of 75,557 in January 2014 and 33% lower than the 90,000 attained before the start of the financial crisis.
The number of remortgage buyers also increased from 32,064 in November to 32,912 in December continuing the upward trend since the summer.
Even though mortgage approvals have been low, house sales for the whole of 2014 were 14% higher than the previous year at 1.22 million and this was the highest since 2007.
Low cost deal attracting homebuyers
Approvals for mortgages reached a 17-month low in November of 58,956 said the Bank of England and a range of low cost mortgage deals has attracted first time buyers and home movers to return to the market.
Data on mortgage rates shows that the average interest rate on new two year fixed loans with 75% loan to value reduced to 2.17% in November last year, down from 2.6% in June and much lower than the 3.35% in December 2012.
For older equity release mortgage buyers, fixed rates can typically be secure from interest rates of 5.9% upwards without any evidence of earnings which is important for borrowers with only pension income.
Homebuyers are also benefiting from rising earnings and lower stamp duty tax which could be helping them back to the market.
For the Help to Buy scheme, the Department for Communities and Local Government (DCLG) has released information showing 83% of the 41,533 loans advanced by December 2014 were first time buyers.
The total value of loans under the scheme is £1.75 billion on property values of £8.81 billion. The average purchase price is £212,128 and equity loan of £42,239.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise, gift to a family member or friend.
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