The number of loans for house purchase rose 6 per cent in November, driven by increased activity in the first-time buyer sector, according to the Council of Mortgage Lenders.
The number of house purchase loans rose 6.3 per cent between October and November to reach 52,700. Of these, 21,700 were advanced to first-time buyers, representing £2.7bn and an 8 per cent rise on October’s figures.
November signalled the largest monthly total for FTBs since the end of 2009, with the exception of March 2012 when demand was driven by the stamp duty holiday. It was the second consecutive month where loans to first-time buyers accounted for 41 per cent of all house purchase loans.
CML director general Paul Smee says: “Encouraging activity in the first-time buyer sector in November contributed to an uplift in house purchase lending suggesting that the underlying trend for year-on-year increases should continue.
“We expect the Funding for Lending scheme to continue to encourage a downward drift in interest rates. This may prompt an increase in remortgage activity as borrowers seek to take advantage of lower rates.”
A total of 31,100 loans worth £5bn were advanced to home movers in November, representing a 5 per cent increase compared to October and up by 6 per cent on the same period in 2011.
Remortgage lending fell in November after the total advanced dropped from £3.5bn in October to £3.2bn. The total was 26 per cent lower than for the same period in 2011.
The median LTV ratio remained at 80 per cent and the percentage of income dedicated to initial interest and capital repayments was unchanged at 20 per cent.