Data from the Council of Mortgage Lenders (CML) shows mortgage lending is up while house price rise is higher over the year.
The CML has released figures showing mortgage lending to first time buyers, home movers, buy-to-let investors and remortgage buyers has increased £19 billion in October up 5.5% from £18 billion in September.
Mortgage lending is lower than the high for the year of £19.6 billion reached in July and considerably lower than the £34.9 billion in June 2007.
The lowest level of lending was £11.7 billion in June 2010 following the financial crisis and recovered to £17.5 billion by mid 2013.
House prices higher over the year
Figures from the Office of National Statistics (ONS) show house prices in the UK have increased by 12.1% year on year to September compared to 11.7% for the month of August.
However, excluding London and the South East UK house prices increased by 9.1% year on year. House prices were higher by 0.5% from August to September.
Prices paid by first time buyers were 13.3% higher on average in September when compared to a year ago and the average home costs £209,000. For owner occupiers or home movers the figure was 11.5% and the average price of a home is £314,000.
According to the ONS prices across the country to August 2014 are as follows:
| Area | Change | Value |
|---|---|---|
| London | 18.8% | £508,000 |
| South East | 11.6% | £338,000 |
| East | 13.4% | £289,000 |
| England | 12.5% | £285,000 |
| UK | 12.1% | £273,000 |
| South West | 9.2% | £249,000 |
| West Midlands | 7.7% | £198,000 |
| Scotland | 7.6% | £197,000 |
| East Midlands | 9.7% | £189,000 |
| Yorks and the Humber | 6.0% | £177,000 |
| North West | 7.7% | £176,000 |
| Wales | 5.8% | £172,000 |
| North East | 6.5% | £154,000 |
| Northern Ireland | 10.9% | £143,000 |
Average house prices for the UK reduced slightly from £273,000 in September compared to £274,000 in August.
However, since July 2014 average house prices in London are lower having reduced £6,000 from £514,000 to the current level of £508,000 in September.
For remortgage buyers higher prices give them an opportunity to release capital which they can use to improve their home, such as adding a kitchen, bathroom or extension further increasing the value.
London prices are up by 18.8% year on year in September whereas this figure was 19.1% in July and over the whole UK property market the figures increased from 11.7% in July to 12.1% in September.
Even so London house prices are 37.9% higher than the pre-financial crisis peak of January 2008.
Higher property values for older homeowners allows the equity release buyer to access money using a lifetime mortgage to gift a child or grandchild the deposit on their property.
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.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost mortgage calculators, equity release calculator and property value tracker chart.
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 or repay an interest only mortgage.
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