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Mortgage lending up in October

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
18/12/2015

Home purchase lending saw an 8% increase over the month, while remortgaging was boosted by 10%

Mortgage lending in October was strong across all sectors, according to the latest breakdown of figures from the Council of Mortgage Lenders.

It said that house purchase mortgage lending in October saw an increase by volume and by value, compared to September and to October last year. This was the second highest monthly house purchase levels, after July 2015, since 2007.

First-time buyers borrowed £4.6bn for house purchase, up 10% on September and October last year. This totalled 29,900 loans, up 8% month-on-month and 3% year-on-year.

And home movers took out 35,400 loans, up 9% month-on-month and 3% compared to October 2014. In total, this was £7.1bn borrowed, up 8% on September and 13% year-on-year.

Paul Smee, director general of the CML, said: “With increasing employment and the current absence of inflationary pressures in the UK, conditions for continuing demand in the housing market seem likely going into the New Year. How supply will respond to this challenge going forward is a crucial question for 2016.”

Rise in switchers

Remortgage activity also increased, up 6% by volume and 10% by value compared to September. Compared to October 2014, remortgage lending was up 19% by volume and a massive 34% by value.

Danny Waters, chief executive officer of Enterprise Finance, said: “Remortgaging activity is finishing the year strongly, increasing on both a monthly and annual basis as homeowners look to lock into competitive rates as rumours of a potential Bank of England Base Rate rise grow louder as we approach 2016.

Buy-to-let boost

Gross buy-to-let lending also saw month-on-month increases up 4% by volume and 3% by value, but more substantial growth year-on-year.

Simon Checkley, managing director of Private Finance, said: “With an increased likelihood of growing homeowner interest and the possibility of less demand from buy to let investors following the Chancellor’s planned tax changes, there is likely to be a contraction in the supply of available rental property. Unfortunately for many tenants, this could give rise to upward pressure on rentals towards the back end of 2016.”