Lending for UK home purchases is bouncing back from a recent dip, according to the latest data. Mortgage lending so far this year, across just the first eight months, has exceeded total annual lending figures recorded during the global financial crisis.
£20 billion was lent in mortgages over the course of August, and this brought the total for the year so far up to £138.6 billion, according to figures recently released by the Council of Mortgage Lenders (CML). This means that, with four months of the year still to go, mortgage lending has already exceeded the entire annual figure for 2010, when just £133.8 billion was lent in mortgages across the whole twelve months of the year. This year’s lending total has also already edged ahead of the full year total for 2011, which saw mortgage providers grant a total of £138.3 billion in credit for property purchases. Based on these figures, the CML said that this year, the mortgage lending market is “ enjoying its best spell since 2008.”
Year-on-year, mortgage lending in August showed a 12% increase on the totals for August 2014. Last year, August’s mortgage lending figures were partly held back by the introduction of new rules, which were slowing down many new applications as well as discouraging some people from making applications. August’s figure was down 8% compared to July, which is in line with common trends. The tendency of August to be a slower month than July is believed to be down in large part to the number of people taking summer holidays.
The strength of activity this year is partly being put down to the number of homeowners seeking to remortgage their properties. As forecasts suggest that the next few months may see the Bank of England finally start to increase interest rates, many homeowners on variable rate mortgages are looking at switching to a new deal in the hope of being better off in the event of a base rate rise than they would have been if they had not remortgaged.
The CML represents a large number of lenders including banks and building societies both large and small, as well as other firms that provide lending for property purchase. Collectively, the businesses and organisations represented by the CML provide around 95% of the UK’s mortgage lending by total value. The CML’s data, which it releases regularly, is therefore held as one of the most complete and accurate measurements of UK mortgage lending.