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August mortgage lending hits six-year high

New data has revealed that banks and building societies have lent more money to homebuyers last month than in any August for the past six years.

The Council of Mortgage Lenders said that its members lent £18.6 billion in August, five per cent lower than July but 13 per cent higher than August last year.

Despite the figures including remortgages, the CML said the majority of the lending was for house purchases.

The last time August lending was so high was in 2008 when it hit £19.3 billion.

Howard Archer, chief economist at IHS Global Insight, told the Guardian: “While the CML data indicates that the housing market is currently seeing decent growth, the bulk of the evidence indicates that activity has lost some momentum compared with the early months of this year, including the Royal Institute of Chartered Surveyors survey for August.

The Institute said new buyer inquiries had fallen for two months in a row and the number of sales agreed last month was down for the first time since September 2012.

“More stretched house prices to earnings ratios, the prospect that interest rates will start to rise before long (albeit gradually) and tighter checking of prospective mortgage borrowers by lenders will likely have some limiting impact on buyer interest,” added Mr Archer.

While the mortgage lending figures point to a similar upturn in lending to home movers, first-time buyers and buy-to-let landlords, it showed a continued fall in the amount lent to those remortgaging.

The average price of a British home stood at £272,000 following three consecutive months of double-digit price rises.

Most of the UK’s regions saw house values jump above their pre-financial crisis peaks, with the average property price in the capital breaking through the half a million pounds barrier for the first time to £514,000.

PM Law’s conveyancing team completed on 133 property moves in July. If you need property advice or to get a quotation call us on 0114 249 6926.

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