This figure means approvals in September were up 34% on September 2012, when 49,848 mortgages were approved, and up 5% from August’s 63,396 approvals. However, the number of approvals for remortgages dropped slightly in September, with 35,178 remortgages approved, down 24% from the 28,286 approved in September 2012.
Gross total lending secured on dwellings reached £15.6bn in September, up 37% from the year before when £11.3bn was advanced.
Brian Murphy, Head of Lending at Mortgage Advice Bureau, comments:
“The latest Bank of England figures provide more good news for consumers as mortgage approvals surged to 66,735 in September - a rise of 14.1% compared to the previous six month average. With high street mortgage lending stepping up a notch even before the arrival of Help to Buy 2, it’s clear that mortgage finance is becoming increasingly accessible and there is now every reason to think about jumping on the property ladder.
“Mortgage rates are at a historic low, with two, three and five year fixes all below 4% for the first time since the recession hit. Combined with a rapidly expanding selection of products – 10,745 options were available during September* – we’re left with the perfect conditions to boost consumer confidence. As a result, we’ve already seen more mortgage applications this year to date than in the whole of 2012.
“It’s clear that the market is continuing to grow, with average mortgage lending swelling by £1 billion in September compared to an average monthly increase of £0.8 billion in the past six months. With the outlook for the end of 2013 and beyond increasingly positive, consumers who have their deposit ready should act now to lock-in to rock-bottom rates before they inevitably rise.”
David Brown, commercial director of LSL Property Services, comments:
“Mortgage lending in the UK is a completely different beast from just a year ago. A surge of new loans is bringing today’s market closer and closer to what would have been called “normal” conditions before 2008. And the rising tide of lending seems to be a force of nature – loan approvals are ticking upwards, pointing to even better figures next month. Tied to a buoyant housing market and rejuvenated house prices, mortgage lending is gradually refloating both – which only a few years ago seemed wrecked.
“What’s vital is that this confidence is also a real life raft for potential homeowners, stricken by the financial crisis. There’s evidence that’s already starting – volumes of loans are growing even quicker than the total value of loans. Right now, wages remain feeble compared to the strength of the storm of inflation, and interest rates are still cripplingly low for struggling savers. Yet rents are rising more slowly than inflation, and the benefits of a healthy housing market are starting to spread. The best is yet to come for those at the bottom of the ladder.”
David Whittaker, managing director of Mortgages for Business, comments:
“The financial world has a new buzz and lease of life, providing a much-needed boost to the property market. Every indicator is now pointing upwards, with all expectations that this month will see even more lending than September. However, it’s critical to look into the detail too. After all, good finance is about lending to the right people in the right places, not just boosting loan books at all costs. Lending to landlords is one of these growth areas, underpinned by strong rental yields, and providing all parties with exposure to the rising tide of property prices.
“But equally, buy-to-let lending serves an important purpose. Loans to landlord are the vital bridge between those already on the property ladder, and those who aren’t. Lending to landlords allows them to expand the supply of property to let. With almost one-in-five now living in the private rented sector that’s vital to keep pace with demand. Commercial mortgages also provide finance for the premises that are physically housing the economic recovery in the form of new businesses. So encouraging figures for business lending could indicate a tipping point, as more commercial mortgage products come to the market.”
Paul Hunt, managing director of Phoebus Software said:
“It’s clear that the mortgage market is turning a corner, judging by the progress that has been made in the last twelve months. A raft of new loans is starting to improve conditions in the mortgage market, and loan approvals are rising upwards. Lenders have been pivotal in supporting first-time buyers with a range of attractive mortgage deals. House purchase lending has been growing steadily: it was conspicuously higher in September than in August, with 5% more lending and annually the increase is striking, up by over a third (34%). The economy is gaining strength and momentum is building as banks lower rates and reach out to help new buyers and home-movers. The growing strength supporting house prices means that the property market is on the road to recovery.”
Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association, comments:
“The latest figures from the Bank of England reflect a strengthening market with mortgage lending increasing by £1billion in September and the number of mortgage approvals rising by 14.1%. It is interesting to note that remortgage loans have outpaced the growth in other sectors over the past month, with the number of approvals for remortgaging climbing from 35,178 to 33,023 in September. This shows that it is not just first-time buyers who are taking advantage of the current competitive rates.
“This continuing upward trend bodes well for the future, but lenders and brokers alike believe there is plenty still to come. The thirst to lend has been quenched with the return of consumer confidence. The Funding for Lending Scheme has played a significant part in this by improving the availability of mortgage credit and keeping mortgage rates consistently low.
“Help to Buy should help to sustain this momentum, but it is important to recognise that we are unlikely to see a return to what might be deemed a ‘normal market’ for another two to three years due to the extent of the downturn. The government and industry both need to keep this in mind and work together as we move towards the formation of a sustainable market.”
