November best month for home loans since January 2008

The number of loans advanced to homebuyers in November climbed above 70,000 for the first time since January 2008, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 71,920 house purchase approvals in November, a 6% increase on October, in a sign of growing lender and consumer confidence. Lending to home-buyers was 34% higher than a year ago, when the number of loans approvals came in at just 53,539.

In November, more than an eighth (13%) of all house purchase approvals were to high LTV borrowers, as lenders increased support to borrowers with deposits worth 15% or less of the total value of their property. There were 9,493 high LTV loans in November, 3% higher than in October, and almost double the number of high LTV loans than in November last year (4,872). It was the highest number of LTV loans advanced in a single month since April 2008.

The increase in approvals follows the release of new data from the Bank of England showing that net lending through the Funding for Lending Scheme tripled in the third quarter of this year. Net lending by banks using the scheme climbed to £5.8 billion between July and September, compared to just £1.6 billion between April and June.

Richard Sexton, director of e.surv chartered surveyors, explains: “The mortgage market is making definite strides back to its pre-crisis health. Between the tail-end of the summer and this autumn, lenders tapped the Funding for Lending Scheme for almost £6 billion worth of funds, and that honeypot is now filtering through to homeowners, in the form of more loans and cheaper rates. Despite the changes to FLS, the mortgage market will continue to thrive. Funding for Lending spurred a limping market into action at the beginning this year, but since then Help to Buy has taken the lead in driving the market forwards.

“November is defying expectations with a continued acceleration in house purchase lending. It comes amid good news of growing GDP and falling unemployment. Positivity is sweeping through the economy and encouraging more prospective homebuyers to the market. And lenders are extending more loans using FLS as a safety valve to release the pressure of lending to riskier high LTV borrowers.”

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