Commentators said that the figures are a clear indication that even before the arrival of Help to Buy the lending sector has been rising to the challenge of getting movement in the real estate market in the UK.
‘Mortgage finance is becoming increasingly accessible and there is now every reason to think about jumping on the property ladder. Mortgage rates are at a historic low, with two, three and five year fixes all below 4% for the first time since the recession hit,’ said Brian Murphy, head of lending at the Mortgage Advice Bureau.
He pointed out that the increase in lending comes at a time when there is a rapidly expanding selection of products with some 10,745 options available during September and this has created the perfect conditions to boost consumer confidence. The result is more mortgage applications this year to date than in the whole of 2012.
‘It’s clear that the market is continuing to grow, with average mortgage lending swelling by £1 billion in September compared to an average monthly increase of £0.8 billion in the past six months. With the outlook for the end of 2013 and beyond increasingly positive, consumers who have their deposit ready should act now to lock in to rock bottom rates before they inevitably rise,’ he added.
According to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), the latest figures from the Bank of England reflect a strengthening market. ‘It is interesting to note that remortgage loans have outpaced the growth in other sectors over the past month, with the number of approvals for remortgaging climbing from 35,178 to 33,023 in September. This shows that it is not just first time buyers who are taking advantage of the current competitive rates,’ he said.
‘This continuing upward trend bodes well for the future, but lenders and brokers alike believe there is plenty still to come. The thirst to lend has been quenched with the return of consumer confidence. The Funding for Lending Scheme (FLS) has played a significant part in this by improving the availability of mortgage credit and keeping mortgage rates consistently low,’ he explained.
He pointed out that Help to Buy should help to sustain this momentum, but it is important to recognise that there is unlikely to be a return to what might be deemed a ‘normal market’ for another two to three years due to the extent of the downturn. ‘The government and industry both need to keep this in mind and work together as we move towards the formation of a sustainable market,’ he added.
The data for lending by building societies and other mutual lenders shows that...