Data from the Council of Mortgage Lending (CML) shows gross mortgage lending for 2015 is the highest for seven years as demand remains high.
Mortgage lending increased by 8% for the year to £220.3 billion and is the highest annual gross lending figure since 2008 according to the CML.
Figures for December 2015 are typically lower as this is a quiet month for homeowners estimated to be £19.9 billion, compared to £20.5 billion for November but 23% higher than £16.2 billion of lending for the same last year.
Lower mortgage rates benefit buy-to-let investors as they can remortgage to reduce the cost of interest repayments to lenders.
Although 2015 was a strong year for mortgage lending, it remains significantly below financial crisis levels when the housing market peaked in 2007 with lending as high as £356.8 billion.
Remortgage lending strongest
The figures for November were £20.5 billion and the highest level of mortgage lending for this month since 2007 although remains 6% lower than the previous month.
Data from the Council of Mortgage Lending shows the strongest increase in lending for remortgage buyers increasing 36.1% over the year from £3.6 billion to £4.9 billion in November 2015 with 29,300 loans.
Remortgaging was also very strong for buy-to-let landlords with a 61.5% increase over the year from £1.3 billion to £2.1 billion in November last year with 13,100 loans.
For home movers the increase was 20.4% with lending rising to £6.5 billion for 32,300 loans. The average mortgage was £165,240 and in terms of affordability home movers spent 18.2% of their household income on capital and interest payments.
The slowest rise was from first time buyers with an increase of 13.5% to £4.2 billion. There were 27,900 loans with an average mortgage of £128,000 and loan to income of 3.46 times.
In terms of loan to value (LTV) figures for first time buyers this is an average of 83.5% so 16.5% of the property value is the deposit.
For home movers the LTV is less at an average of 72.7% which means 27.3% of the property value was the deposit for the new home.
Mortgage lending to older homeowners is higher with equity release buyers able to stay in their homes while accessing wealth using a lifetime mortgage to help maintain their standard of living as costs rise.
Demand unexpectedly high
According to the latest survey from the Royal Institution of Chartered Surveyors (Rics) 16% of chartered surveyors reported a rise in new buyer enquiries.
The Chief Economist Simon Rubinsohn said the housing market experienced an unusually buoyant December. This could be due to the Chancellor’s Autumn Statement announcing a rise in stamp duty to 3% for buy-to-let landlords.
As a result new buy-to-let investors may look to buy properties before the April 2016 deadline and we can expect to see the housing market heating up in the next few months.
The survey also shows that house prices in London, the South East and East Anglia are expected to increase over the next five years by 5% each year.
Of the surveyors 62% said property in the South East are expensive and 57% of surveyors in London said the same about the capital. In contrast 92% of surveyors from Northern England said property there offered fair value for money.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything or even benefit a family member.
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