The Council of Mortgage lenders has reported mortgage loans for house buyers reached £22 billion in July, a new post-crash record.
Mortgage lending increased by 9% in July to £22 billion compared to £20.1 billion in June and is 14% higher than the £19.4 billion figure this time last year.
The figures for June were made up of 61,000 home buyers including first time buyers and home movers. Another 31,600 are remortgage buyers and 33,600 buy-to let landlords including those buying and remortgaging properties.
Lending is still behind the levels in July 2008 of £23.6 billion and the July 2007 peak of £33.8 billion.
CML economist Mohammad Jamei said lending was expected to strengthen in the second half of the year. Upward pressure on house prices would be kept in check by stretching buyer affordability with gross lending expected to rise 3% to £209 billion this year.
Mortgage market recovering since election
Lending in the first half of the year was slow due to uncertainty surrounding the general election with mortgage levels of £13.5 billion in February rising to £16.1 billion in May.
Consumer confidence has bounced back with people more confident about their personal finances and the economy according to the CML.
With mortgage rates remaining close to their lows, growth in wages and fear of interest rates rising, mortgage approvals have been at their highest levels in June and July with 20% to 30% more loans over the month from first time buyers, remortgage buyers and home movers.
For remortgage buyers at the end of your mortgage deal, avoid the lenders expensive variable rate and switch to a preferential rate to reduce your monthly repayment costs.
In addition buy-to-let mortgages have seen strong growth with 22.8% more numbers of loans at 22,100 valued at £3.4 billion up 25.9% month on month.
The figures of home buyer loans includes first time buyers and home movers at 61,000 which is significantly lower than the peak of 142,400 reached in July 2002 and the last time mortgages were above 100,000 in August 2007.
Currently there is a large supply to cheap mortgage deals on the market even with a low deposit of 10%. The difficulty is home buyers must meet tighter affordability rules introduced the the Mortgage Market Review (MMR).
The equity release mortgage buyer can secure fixed rates without any evidence of earnings, important for borrowers with only pension income.
Lenders must now take into account your income and commitments such as child care and loans. This is also stressed tested in relation to your ability to afford the mortgage even with a rise in interest rates.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home 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 equity release calculator, mortgage cost calculators, and property value tracker chart.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to improve your quality of life, home improvements or even buy a more expensive home.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
