Member Article

Mortgage lending experiences growth in 2011

Mortgage lending in November of last year saw a year-on-year rise, for only the second time in 2011.

According to the Council of Mortgage Lenders, loans for house purchase totalled 47,000 in November, a 4% rise from October, and a 3% rise compared to November 2010.

Remortgaging also increased, as there were 31,200 loans, rising from 30,700 the previous November.

The volume of loans taken out by first time buyers was up by 4%, and home mover loans increased by 5%.

First time buyers continued to see a decline in the proportion of their income accounted for by mortgage interest payments: 12.2% in November, compared to 12.3% in October and 13% in November the previous year.

Interest payments for home movers maintained 9.2% proportion for the second month, representing the lowest proportion in nine years.

A likely rise in interest rates spurred 65% of all borrowers to take out a fixed rate mortgage in November, marking their highest point in more than two years.

The majority of borrowers chose repayment mortgages: 98% of first time buyers; 83% of movers and 79% of remortgagers.

Director of the Council of Mortgage Lenders, Paul Smee, said: “A rise in mortgage lending towards the end of 2011 is a welcome indicator for the industry considering confidence has been weak due to fragile economies both at home and in the Eurozone.

“We should expect a further increase in first-time buyer activity over the next few months as they push through their purchases to take advantage of the stamp duty concession before it ends in March.”

This was posted in Bdaily's Members' News section by Tom Keighley .