This is the second highest monthly house purchase levels, after July 2015, since 2007.
UK gross lending overall in October totalled £21.9bn, up 9% on September and 19% on October last year. This is the highest monthly gross lending figure since July 2008.
First-time buyer lending grew for the second month in a row, to be the joint highest monthly lending level (alongside July 2015) by volume and by value since August 2007. First-time buyers borrowed £4.6bn for home-owner house purchase, up 10% on September and October last year. This totalled 29,900 loans, up 8% month-on-month and 3% year-on-year.
Home movers borrowed £7.1bn in October, only behind July this year for the highest amount borrowed since 2007. Home movers took out 35,400 loans, up 9% month-on-month and 3% compared to October 2014.
Remortgage activity saw a rise by volume and by value in October compared to September and October last year. Remortgage activity also increased, up 6% by volume and 10% by value compared to September. Compared to October 2014, remortgage lending was up 19% by volume and 34% by value. This is the most amount of remortgage loans in a month since January 2009, and the most amount borrowed for remortgage since June 2008.
Gross buy-to-let lending increased substantially in October, up by volume and by value in comparison to the previous month and the same time last year. This is the highest monthly gross buy-to-let lending level by value and by volume since we began tracking buy-to-let data on a monthly basis in January 2013. Buy-to-let remortgage is currently driving this with larger year-on-year growth compared to October 2014.
Paul Smee, director general of the CML, commented:
Home owner and buy-to-let activity have both continued the upward trend seen last month, and the market looks set to finish the year strong, despite taking time to gain momentum after a slow start to 2015. With increasing employment and the current absence of inflationary pressures in the UK, conditions for continuing demand in the housing market seem likely going into the new year. How supply will respond to this challenge going forward is a crucial question for 2016.
Jeremy Duncombe, Director, Legal & General Mortgage Club, added:
“Strong UK economic conditions, driven by low rates, low inflation and rising wages, spurred mortgage lending in October. It is encouraging to see that remortgaging activity has continued to increase after a slow start to the year, as more people have sought to take advantage of the low rates available. With that said, however, fixed rates have edged up over the past few weeks as lenders start to price-in a future rise in the bank rate. It is therefore paramount that borrowers seek advice to secure a low rate today or risk missing out on a substantial cost saving.
“The figures also show that buy-to-let activity remained strong in October as more people looked to alternative ways in which to invest their money. We expect this area of the market to become more active in the next few months, ahead of the new Stamp Duty rate which is due to be introduced in March 2016. Prospective landlords may rush to the market ahead of this change to avoid the additional cost, which will drive up mortgage lending in Q1 2016. The resulting increase in demand, combined with the current lack of available properties, is likely to push up house prices at the beginning of the year.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said:
"October saw the mortgage market gathering some real momentum, with increases in lending for first-time buyers, home movers, those remortgaging and landlords. After a slow start fuelled by general election uncertainty, it is proving to be a back-loaded year, with November and December continuing to be busy.
"Lenders have a keen eye on year-end targets so there are some very competitive deals to tempt borrowers. Even though a handful of lenders have raised rates in the past week, this may be more to do with trying to control business volumes over the festive period rather than evidence of the start of an upwards trend in pricing. We still expect plenty of competitive rates in the January sales, many aimed at those coming up to remortgage who may be concerned that interest rates might finally rise next year.
"The number of first-time buyers continue to grow, as they take advantage of the plethora of high loan-to-value deals available. However, a fall in pricing means that first-time buyers are not overstretching themselves as they are paying close to a record low proportion of their monthly household income to service their mortgages.
"Landlords may be disgruntled by the double whammy of tax changes and the impending hike on stamp duty, but they can’t complain about some of the cheapest buy-to-let rates ever. However, lenders are beginning to impose tighter criteria on buy-to-let mortgages when it comes to stress testing, and others are expected to follow, making it harder to qualify for higher loan-to-value mortgages, particularly in the south where yields are low."
