First-time Buyers

Bank mortgage lending up 38%

Adam Williams
Written By:
Adam Williams

Mortgage lending by banks has risen by 38% in the last year, statistics released by the British Bankers

The trade body said gross lending by its members reached £11bn in March, 38% higher than the same month in 2013.

Higher capital repayment, partly down to homeowners moving between lenders, caused net borrowing to shrink during much of 2013 but has now began to rise thanks to increased demand in the market.

Approvals for house purchase are 43% up on a year ago while remortgage has increased by 14% at banks. Other types of secured lending fell by 9% in this period.

The BBA said mortgage assistance schemes like Help to Buy remained useful as they helped first-time buyers onto the housing ladder and kickstarted housing chains.

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), said: “Activity remained strong during March despite many lenders engaging heavily in the final preparations for tomorrow’s Mortgage Market Review (MMR) deadline. Looking at the seasonally adjusted figures, purchase and remortgage volumes were only marginally down on the preceding months and significantly higher than March 2013.

“While the MMR changes are receiving a lot of attention, the question of affordability has been an increasing focus for some time and the intermediary market especially is already well equipped to provide the clarity of advice that underpins the new rules.”