Mortgage lending stays strong in February chill
House purchasers took out 33% more loans in February 2014 than in the same month a year ago, while on a monthly basis the figure remains steady.
First-time buyers took out 22,200 loans in total in February, 41% more than February 2013 and a modest rise of 2.3% compared to January.
Paul Smee, director general of the CML, said: “We would expect a seasonal lending dip around this time of year. However, lending to both first-time buyers and home movers bucks this trend, continuing to show momentum.
“The substantial year-on-year growth shows how far the market has moved since the flat period experienced up until around a year ago.”
The number of loans taken out by home-owners for remortgaging fell by 15% in February compared to January, yet there was still a strong year-on-year increase of 17%.
Home movers took out 2.2% fewer loans than January, yet 27% more than February last year.
Gross buy-to-let loans advanced decreased to 14,300 in February compared to 15,700 in January, but there was a strong year-on-year increase in volume of 46% compared to February 2013.
Smee added: “The industry is ready for the transition, although there is clearly potential for lending to be distorted temporarily over the coming months, given the magnitude of the changes and the importance of complying with regulatory expectations.
“Overall, we expect to see continuing growth in mortgage borrowing ahead, within responsible lending parameters, as the pent-up demand of the recession years finds an outlet in a stronger market.”
Lucy Hodge at Vantage Finance, said: “We’ve had a strong pipeline of applications since the beginning of 2014 and February’s figures show just how much the market has developed over the last year.
“The demand for buy-to-let properties is high and it will be interesting to see what the knock-on effect of the MMR later this month will be on this unregulated market. It remains to be seen whether demand will soar and whether lenders will become more stringent in this market too.”