The Council of Mortgage Lenders (CML) released figures this week on the lending trends in January 2014 and it has made for some good reading.
The data covered borrowing by First Time Buyers, Remortgagors, Home Movers and Buy To Lets and was based on comparing figures to January 2013. Although there was a slight dip on December 2013 to January 2014 figures, January 2014 saw an increase of 30% on January 2013.
When you take into account New Year is always a bit slower on the mortgage & property front, to have such an increase over last year is very positive and no doubt the Help to Buy Schemes have had an effect.
In fact the number of first time buyers was substantially up on January 2013. People remortgaging after Christmas was also up 10% compared to Jan 2013. The increasing upturn in Buy To let lending was not exempt; this area also saw an increase.
The Bank of England reported earlier this month that UK gross mortgage lending was £16.1 billion in January, which was an increase of 39% compared to January 2013.
That’s a massive increase and affects the whole property and mortgage chain, including increased work for Advisers, Solicitors, Surveyors, Estate Agents, Builders and this all has a knock on effect to the recovering economy.
An interesting stat that came out was that the average loan-to-value for first-time buyers was 82% in January, up from 80% seen in December 2013 and a year previous in January 2013 and over 95% of first-time buyers opted for fixed rate mortgages in January.
Fixed rates could become more popular, especially if you believe some of the forecasting coming from market, Mark Carney the Governor of the Bank of England believes “Interest rates could rise in months before the general election, regardless of the impact on voters”, The Bank of England governor said it would be ‘a welcome time’ when rates do rise from their record lows, but other factors would play a part in deciding when to begin an increase.
Mr Carney also claimed the ‘end of the recovery is in progress’ but Britain will continue to face ‘extraordinary times’ for many years.
It certainly appears that the introduction of the Help to Buy mortgage guarantee scheme has started to have an impact on FTB deposit requirements.Similarly, Buy-to-let loans for house purchase followed the same trend totalled £900m in value, which was up 32% compared to January 2013.
Paul Smee, director general of the CML, commented: “January is always a subdued month in the mortgage market but the underlying trend and strong year-on-year growth across all borrower groups indicates a strong start to 2014 continuing the sort of lending levels seen throughout 2013. Lending to first-time buyers and home movers has continued its upward trend and this, coupled with the growth in remortgage and buy-to-let activity, would suggest that all parts of the market are open for business.”
I am all in favour of a healthy housing market, I just hope that those with the power to change interest rates and lives! Take care.