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New mortgage lending dips and remortgages increase

Total net lending to individuals rose by £1.5 billion in August The twelve-month growth rate increased by 0.1 percentage points to 0.9%. The three-month annualised growth rate remained at 0.6%.

Within the total, net lending secured on dwellings increased by £1.7 billion, above the July figure of £0.0 billion and the previous six-month average of £0.7 billion. The twelve-month growth rate remained at 1.0%. The three-month annualised growth rate increased to 0.8%, from 0.5% in July

Nicholas Leeming, commercial director of Zoopla.co.uk, said:

“The latest figures from the Bank of England highlight just how tough it is for the majority of people looking to buy a house at the moment. The tight criteria set by lenders have led to a fresh drop in the number of new mortgage approvals, with the market still heavily favouring the cash rich. The true health of the housing market depends on activity by first-time buyers, who are unfortunately at present being turned away by lenders. With lenders also having to repay the Special Liquidity Scheme funding provided by the Bank of England from next year, the outlook for additional mortgage funding looks limited.

“It’s not just lenders who are cooler on the market though.  Demand is also a little softer while supply has picked up. The market is not set to crash, but there is little likelihood of renewed surge for the time being.”

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