CML: Remo lending up 34%
Remortgage lending rose by 34% in the year to October 2015 by value, data from the Council of Mortgage Lenders has revealed.
he remo market also performed strongly from the month before, as the value of deals rose by 10% from September.
Remortgage lending volumes rose by 19% year-on-year and 6% on a monthly basis.
Jeremy Duncombe, director, Legal & General Mortgage Club, said: “Strong UK economic conditions, driven by low rates, low inflation and rising wages, spurred mortgage lending in October.
“It is encouraging to see that remortgaging activity has continued to increase after a slow start to the year, as more people have sought to take advantage of the low rates available.
“With that said, however, fixed rates have edged up over the past few weeks as lenders start to price-in a future rise in the bank rate. It is therefore paramount that borrowers seek advice to secure a low rate today or risk missing out on a substantial cost saving.”
In the month to October Buy-to-let lending rose by 3% by value and 4% in volume.
Duncombe added: “We expect this area of the market to become more active in the next few months, ahead of the new Stamp Duty rate which is due to be introduced in March 2016.
“Prospective landlords may rush to the market ahead of this change to avoid the additional cost, which will drive up mortgage lending in Q1 2016. The resulting increase in demand, combined with the current lack of available properties, is likely to push up house prices at the beginning of the year.”
First-time buyer lending values rose by 10% both on September and October last year.
Phoebus Software managing director Paul Hunt predicted £215bn of lending this year in the wake of the CML figures.
He said: “With record lending levels in October, it is now highly likely that we will exceed the CML’s revised gross lending forecasts for the year, as I expect that we are looking to finish the year closer to £215bn of lending.
“It has been a good year for first time buyer as more are making it onto the property ladder as competitive mortgage rates mean first-time buyers continue to pay lower levels of their monthly household income to service the capital and interest rate payments of their mortgage, while government schemes are helping people to buy the property in the first place.
“The buy-to-let market also appears to remain buoyant despite the numerous fiscal and legislative changes imposed. It looks like the market is rallying up to a good end to the year and a positive start to 2016.”