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Lending for property purchase highest for year

By contrast, remortgaging rose both on a monthly basis, and on the same month last year. There were 31,500 remortgages worth £4billion in July, up from 31,300 worth £3.8billion in June.

Lending to first-time buyers hit its highest level in a year in July. The value rose to £2.3billion, from £2.2billion in June and was the highest monthly total since last July (£2.4billion). By number, there were fewer loans to first-time buyers – 18,200 first-time buyer loans, down from 18,500 in June and 19,500 in July 2010.

Both the number and value of loans to home movers increased in July. 30,600 loans were advanced – up by 4% compared to the previous month, while the value totalled £5billion – up by 6% compared to June.

Compared to July last year lending to home-movers was down by 15% (17% by value).

For another month both first-time buyers and home movers experienced little change in lending criteria.

Average deposits for first-time buyers have held steady at 20% for most of 2011 and they typically borrowed 3.18 times their income in July, down from 3.22 in June. Home movers borrowed on average 69% of their property’s value in July, down from 70% in June, but this figure has fluctuated by no more than three percentage points for nearly three years.

The popularity of fixed-rate mortgages is beginning to recede after hitting a 18-month high in April. In July, 60% of borrowers took out a fixed-rate product, down from 62% in June. This drop follows increasing expectation that there will be no rise in bank rates in the near future. But the path of interest rates into next year is far from certain and many borrowers may continue to opt for fixed rates to avoid the uncertainty.

The majority of borrowers are continuing to opt for repayment mortgages – 42,200 loans for house purchase (86%) and 24,300 remortgage loans (77%) were taken out on a repayment basis in July.

CML director general Paul Smee said: "The UK mortgage market is currently holding steady. But August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months. However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages."

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