March 23 2017 Latest news:
Ed Foss, Senior writer
Wednesday, August 10, 2011
The figures from the Council of Mortgage Lenders (CML) relate to June. More first-time mortgages were granted in that month than have been granted for a period of 10 months.
There were 18,100 loans to first-time buyers, worth £2.2bn, 24pc higher by volume and 29pc higher by value than in May.
Home movers took out 28,600 loans, worth £4.6bn, in June. This was up from 23,800, worth £3.7bn in May.
Remortgaging was unchanged in June, totalling 30,700 loans worth £3.8bn.
The popularity of fixed-rate mortgages continued to edge up in the second quarter, with 63pc of borrowers opting for a fixed rate, compared to 60pc in the first quarter and just 46pc in the second quarter of 2010.
While no immediate rise in interest rate rises is expected, uncertainty over when the first rise will come may have been encouraging borrowers to fix their rates in the second quarter.
The trend away from interest-only mortgages continues for all borrowers, with 87pc of house purchase loans in June taken out on a repayment basis, up from 86pc in May. This is likely to persist as future home movers and remortgagers continue to take out future mortgages on a repayment basis.
CML director general Paul Smee said: “Whilst there are clearly financial uncertainties ahead, it is encouraging to see more house buyers surfacing at the start of summer.
“Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while.”
Chris Gardner, a director of independent mortgage broker Obligo.co.uk, said: “The June spike in first time buyer mortgage advances reflects the surge in products at higher LTVs and the more favourable criteria of lenders.
“There are now plenty of competitive 90pc products in the market and we are also seeing more lenders move into higher LTVs, which is driving rates down further.
“In recent months, more lenders have even returned to the 95pc LTV range, although these products are still in relatively limited supply.
“What we have also seen in recent months is the gradual realignment of vendor and purchaser expectations.
“Sellers are increasingly accepting that they have to lower their asking prices if they want to find a buyer, while buyers understand that they cannot go in with unrealistic offers.
“The result of this realignment is increased transactions at all LTVs, which are reflected in the June data.”