First-time buyers, home movers, home-owner remortgage and buy-to-let all saw a monthly decline in lending in August but a rise (significant for buy-to-let) compared to August 2014, according to the CML Monthly Lending Trends report for August.
The CML said this is a normal seasonal trend, with August typically less strong for mortgage completions.
Bob Pannell, chief economist of the CML, said: “Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year-on-year growth, and we expect this to continue over the coming months.”
House purchase lending in the UK saw a month-on-month decline by volume and by value for the first time since April this year. However, this was the third consecutive month that lending for house purchase increased year-on-year by volume and by value. This was the highest house purchase lending activity level for the month of August since August 2007. However, volume levels this month were still only 60% of what they were in August 2007.
Remortgage activity dropped month-on-month in August 17% by volume and 18% by value compared to July. However, in parallel to house purchase activity, there was a year-on-year increase compared to August 2014 by volume and by value, up 11% and 20% respectively.
Richard Sexton, director of e.surv chartered surveyors, added: “Summer shouldn’t be read as a setback. Mortgage lending is remains strong – despite a seasonal dip in August.
“In terms of house purchase approvals, we’re seeing lending going from strength to strength. Since these figures for August, volumes have shown steady progress into September and October. There’s particularly good news for first time buyers. Smaller deposit lending is the most buoyant area in the pipeline, and this tallies with today’s encouraging picture from the CML for those joining the bottom of the ladder.
“Meanwhile with deflation the reality once more, the chances of higher interest rates are receding again. There’s a long way to go until real optimism in the housing market compares to the pre-crisis atmosphere – but for the immediate future the weather seems set fair.”