Data from the CML shows overall lending is up 19% year on year as remortgage buyers return after a dip during the summer.

For the month of September remortgage buyers are 20.2% higher  by numbers month on month at 31,000 up from 25,800 and 18.6% up by value at £5.1 billion compared to £4.3 billion in the previous month.

The Council of Mortgage lenders (CML) have released data that confirms mortgage lending rose to £21.8 billion in October from £18.4 billion last year up 19.0% year on year.

Lending for October is the highest monthly figure since gross lending reached £23.6 billion in July 2008 and is 8.4% higher than September at £20.1 billion.

Mortgage lending is increasing

Lending to first time buyers, home movers, remortgage buyers and buy-to-let landlords has increased in the third quarter according to the CML.

For the third quarter lending increased to £61.4 billion or 18.0% from £52.0 billion in the second quarter and compared to the previous year of £55.0 billion mortgage lending is 11.6% higher.

The value of homeowner loans in the third quarter for house purchases were 57% of gross lending with remortgage buyers accounting for 24% of activity. The buy-to-let market accounted for 18% of total lending.

Paul Smee, director general of the CML said that the mortgage market started slowly in 2015 but the third quarter shows it is on an upward trajectory.

There is currently a high level of product choice available for homeowners at competitive rates along with generally improving economic conditions and the CML expects mortgage lending growth to continue in the new year.

Older remortgage buyers are often forced to repay their loan at a certain age and rather than downsizing, the equity release mortgage buyer can repay an interest only mortgage and consolidate debt.

Buy-to-let still the smallest market

The buy-to-let market has seen significant growth in lending in the last year with the number of loans increasing 36.2% from 17,700 last year to 24,100 for September this year.

In terms of value this has increased by 48.0% over the year from £2.5 billion to £3.7 billion with the remortgage buy-to-let even higher up 61.5% from £1.3 billion to £2.1 billion.

Paul Smee, has said the buy-to-let market is only 18% of new lending in September and remains the fourth largest lending type behind first-time buyers, home movers and remortgage buyers.

There were five times as many house purchase loans to homeowners as buy-to-let landlords in September, with buy-to-let lending growth resulting from the recovery from recession.

According to Bob Pannell, CML chief economist, mortgage loans picked up in the summer and are expected to improve. This is being helped by continuing to be low inflation, strong wage growth, an improving labour market and competitive mortgage deals.

Therefore lending is likely to exceed the CML forecast of £209 billion for this year.

However, affordability pressures will limit the number of first-time buyers and movers so there is only a modest upside potential in the short term.

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 buy a more expensive home.

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 or even give to a family member.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, mortgage monthly cost calculators, and property value tracker chart.

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