The UK mortgage market was revitalised in August after re-mortgaging and lending to first-time buyers and home movers increased, following the implementation of lower interest rates.
According to data released by the Council of Mortgage Lenders (CML), the number of re-mortgages climbed 33 percent in the 12 months ending August 2011, while the value of loans rose 31 percent in the same period.
Lending to first-time buyers and movers peaked for over a year, though the lending criteria remained static at an 80 percent loan-to-value (LTV) average. The volume of loans for this segment increased by four percent in July, compared to nine percent in August 2010.
Home purchase loans climbed seven percent month-on-month in August, compared to two percent in August 2010, while the value increased 10 percent from three percent in August 2010.
“Even though it is impossible to ignore the knocks to confidence emanating from the Euro Zone, August lending showed welcome signs of life,” said Paul Smee, Director General of the CML.
“These latest mortgage figures are encouraging given the overall state of the economy. On the one hand, you have an economic climate that reduces the incentive for people to buy, but on the other, the combination of highly competitive mortgage rates and low house prices is proving irresistible,” remarked Chris Broome, Director at Broome Financial Planning.
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