Friday 18 October 2013

Mortgage lending at highest level since 2008


Mortgage lenders said on Friday that they were financing the largest house-buying spree for five years, in the latest sign of an accelerating housing market.
The Council of Mortgage Lenders (CML) described house prices in London as "resurgent", though it acknowledged that they had risen only modestly elsewhere in the country.
Amid continuing debate about the impact of government-sponsored schemes designed to make credit more easily available, research by the Liberal Democrat peer Lord Oakeshott showed, however, that the house price revival was not just a London phenomenon. 
Houses in more than 50 local authority districts were revealed as less affordable than at the peak of the 2007 credit crunch. Oakeshott's analysis of local authorities in England found the ratio between local house prices and local earnings was higher than it was in 2007 in districts as diverse as Rutland, the Cotswolds and the Suffolk coast.
According to the CML, almost £50bn was advanced to home buyers in the third quarter of 2013, a 17% increase on the previous three months and the highest figure since the third quarter of 2008. Despite a slight dip in September, lending for that month was up 41% on the same month last year, at £16bn.
"Indicators suggest we are witnessing the strongest house purchase performance in five years," said the CML's chief economist, Bob Pannell. "House prices too have revived, but modestly, aside from a resurgent London market."
The earlier than expected introduction of the second stage of Help to Buy, designed to help buyers with deposits as low as 5% of the value of a property has sparked a debate about the potential for a boom in house prices.

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