Thanks to first-time buyers, mortgage lending recovered in June after their strong return to the property market, according to the Council of Mortgage Lenders (CML).
Compared to May, the value of mortgages which were taken out by first-time buyers rose 24 per cent. This put an end to a fragile period of time, which saw lending to first-time buyers drop 27 per cent since January. It also helped increase overall lending by 22 per cent.
This rise in action by first-time buyers can be attributed to the record-low mortgage rates that have been on offer. The figures in the CML’s report also showed that buy to let is continuing to grow in popularity.
This all comes after the governor of the Bank of England, Mark Carney, said that interest rates could potentially rise from the 0.5 per cent rate they have been stuck at for six years.
“Overall in June, the value of homeowner loans for house purchase accounted for 54 per cent of gross lending, while remortgage activity accounted for 25 per cent,” the CML’s report said. “Buy to let as a proportion of total lending remained at around 17 per cent but still makes up a larger portion of total lending compared to the same time last year.”
Mortgage rates have been rising, and Mark Harris, of SPF Private Clients, said: “There is more re-mortgaging activity. A few lenders have increased their fixed-rate pricing but there are still plenty of excellent deals available and will continue to be as lenders compete for business.”
