Strong home-owner house purchase numbers through 2013 continued into the closing months resulting in a 19% year-on-year increase in volume in the fourth quarter 2013 and overall 2013 was up 11% on 2012, according to the CML.
Although not as strong as house purchase, remortgage lending showed growth in the last quarter of 2013, up 8% year-on-year for that quarter, resulting in a 2% yearly increase in 2013 compared to 2012.
Buy-to-let lending also finished strongly in the last quarter of 2013, up 20% compared to the last quarter of 2012, in addition, buy-to-let loans for house purchase increased 18.6% in 2013 compared to 2012.
The Bank of England reported earlier this month that UK gross mortgage lending was £16.8 billion in December, which due to the expected seasonal dip was down slightly by 1% but up 49% compared to December 2012. In the fourth quarter of 2013, gross UK mortgage lending totalled £51.4bn which was an increase of 36% compared to the fourth quarter of 2012. Overall for 2013 gross lending totalled £176.4bn, up 21% on 2012.
The total number of loans advanced to home-owners for house purchase decreased slightly in December 2013, down 1% compared to November but up 27% on December 2012. Overall, 58,200 loans were advanced in December with a total in value of £9.3bn, which was an increase of 1% by value on November but a 35% year-on-year monthly increase.
In the fourth quarter of 2013, the total number of loans to home-owners for house purchase was 176,500, up 5% compared to the third quarter 2013 and up 20% compared to the fourth quarter 2012.
Overall in 2013, the total number of loans advanced to home-owners for house purchase 605,100 loans, up 11% compared to 2012 overall. The value of these loans totalled £93.7bn, up 15% compared to 2012 overall.
Commenting on the data, CML director general Paul Smee said:
"In 2013, there has been a resurgence in the mortgage market with year-on-year growth for all types of borrower. First-time buyers were an especially important factor in driving the market forward in 2013 as improved economic conditions, as well as the introduction of government schemes like Help to Buy, have given the opportunity for them to enter the market and become home-owners."
"The consistent upward lending trend seen throughout 2013 would suggest relative optimism going forward. But there are challenges ahead, not least in implementing the Mortgage Market Review regulation in April and in ensuring that there is no suggestion of a property bubble; and all this will be key to determining how the market will perform in 2014."
David Brown, commercial director of LSL Property Services, comments:
“First time buyers have entered 2014 with an extraordinary momentum – not seen for seven years. And every indication is a further acceleration in these first few months of the New Year.
“However, it is important to remember that property is still growing less affordable in terms of wages. For the time being a far healthier mortgage market has pulled out all the stops, but the next stage will be when earnings rather than mortgages can make homes more affordable. In the meantime renting is often more realistic on a monthly basis. Investment by landlords has brought average rent rises down to levels comparable with the pace of wider inflation, supported by solid progress in buy to let lending.”
