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Mortgage lending rise points to housing market revival

The mortgage figures released today, which showed that lenders enjoyed their strongest month since October 2008, are the latest numbers that point to a housing market revival.

  • Last week, a report by the Council of Mortgage Lenders showed that first-time buyers have risen to the highest levels since 2007.
  • House prices are rising at their fastest rate since 2006, according to the Royal Institution of Chartered Surveyors.
  • Asking prices on flats have also reached an all-time high, property search website Rightmove reported yesterday.
  • They also found that prices in London are up by 10% compared with a year ago as confidence flows back into the market.

Mortgage figures show housing market 'strengthening'

An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.

Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.

– Caroline Purdey, Council of Mortgage Lenders market and data analyst

Read: Gross mortgage lending increases 29% since July 2012

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Gross mortgage lending increases 29% since July 2012

File photo of houses in south Derbyshire. Credit: Rui Vieira/PA Wire

The total gross mortgage lending in July increased to £16.6 billion - a rise of 12% from the previous month, according to figures released by the Council of Mortgage Lenders.

The figures also represent a 29% increase from July last year and is the highest monthly estimate since October 2008.

Young face 'decades of saving' to buy first home

Independent research commissioned by housing charity Shelter shows that people in their 20s have become locked out of home ownership. Credit: PA Wire

Young people trapped by high property prices face having to save for up to 30 years before they can afford a deposit on their first home, a charity warned.

Independent research commissioned by housing charity Shelter shows that people in their 20s have become locked out of home ownership, meaning a generation will be stuck renting for longer.

The study looked at earnings, house prices, rents and spending on essentials in local authorities across the country to show the extent of the challenge faced by households wanting to save a deposit to buy a home in their area.

Mortgage lending 'dips' for first-time buyers

New figures, released today, has shown first-time buyer mortgage lending has dipped for the first time since the start of the year.

Mortgage lenders have insisted that first-time buyer activity is strengthening, despite the dip. Credit: PA

Some 19,400 loans worth £2.5 billion were taken out by first-time buyers in April, a 1% decrease on the previous month, according to Council of Mortgage Lenders (CML) figures.

This marked the first drop in first-time buyer numbers since January.

Despite the recent pause, activity among first-time buyers in the first four months of the year has been stronger than during the same period a year ago, with 11% more loans advanced, the CML said.

House prices 'show strongest growth in 18 months'

House prices have recorded their strongest year-on-year growth in 18 months, in further signs that the market is gathering momentum, Nationwide has reported.

House prices are now 1.1% higher than they were a year ago reaching £167,912 on average, the building society said.

Homes back under the hammer
Homes back under the hammer Credit: Anthony Devlin/PA Wire

The prices have been boosted by a sharp increase in the number of mortgages on the market, partly as a result of the government's Funding for Lending scheme, which has given lenders access to cheap finance to help borrowers.

Other government schemes like NewBuy and Help to Buy have also helped by giving people with smaller deposits a helping hand.

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Age UK calls to 'lift age limit' on mortgages

A regulator warned that those on interest-only mortgages are facing a "wake up call". Credit: John Stillwell/PA Wire

Age UK's charity director general has called for banks and building societies to lift "arbitrary age limits on loans" after a financial regulator warned that up to half of interest-only borrowers will not have enough money to pay their loans back.

Michelle Mitchell said that the age limits prevented older people who could afford a mortgage from extending the term of their loan.

She said: "Decisions on lending should be based on whether an individual is able to repay a loan not on an outdated vision of what it means to be older. It is also important to have access to targeted, independent advice for those older people who are experiencing difficulties."

What to do if you have an interest-only mortgage

A guide for homeowners on interest-only mortgages has been released by the Money Advice Service.

A regulator warned that those on interest-only mortgages are facing a "wake up call". Credit: Dominic Lipinski/PA Wire

The Financial Conduct Authority warned that those on interest-only mortgages are facing a "wake up call" because around half will not have enough money to pay their loans back.

Read: Warning for homeowners with interest-only mortgages.

Low interest rates are creating a 'golden opportunity'

Mortgage expert Ray Boulger told Daybreak that because of low interest rates, there is currently a "golden opportunity" for people to address their mortgage payments.

A regulator has warned home owners on interest-only mortgages that they are facing a "wake-up call" because up to half of these borrowers will not have enough money to pay their loans back.

Mr Boulger said: "If for example you took out a mortgage before the credit crunch probably you'd have started off paying interest rates of about 6%, now you might be paying 3%. So even though some people's incomes are squeezed, a lot of them will have probably seen their payments come down by half.

He added, "take advantage of the current interest rate periods to start repaying the mortgage."

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