There were 18,100 loans to first-time buyers, worth £2.2 billion, 24% higher by volume and 29% higher by value than in May. June's first-time buyer numbers were exactly the same as in last August, but 8% lower by volume and value than in June 2010.
Home movers took out 28,600 loans, worth £4.6 billion, in June - up from 23,800, worth £3.7 billion in May, but down from 32,800 loans, worth £5.3 billion, in June 2010.
Overall, there were 46,700 loans for house purchase, worth £6.7 billion, in June, up 22% in volume and value from May, but down 11% by volume and 13% by value on June 2010.
Remortgaging was unchanged in June, totalling 30,700 loans worth £3.8 billion. Unlike lending for house purchase, however, remortgaging was up 10% by volume and 9% by value on June 2010.
Loans for house purchase and remortgage
Lending for house purchase increased in the second quarter. Between April and June, there were 122,000 loans for house purchase, worth £17.6 billion, up from 97,200, worth £14.1 billion, in the first quarter. But lending for house purchase was lower than in the second quarter last year, when there were 138,300 loans, worth £20 billion.
Between April and June, lenders advanced 87,600 remortgaging loans, worth £10.8 billion, down from 92,700, worth £11.2 billion, in the first quarter, but up from 78,400, worth £9.8 billion, in the second quarter of 2010.
First-time buyers, lending and affordability
There was little change in lending requirements for either first-time buyers and home movers in June. First-time buyers, on average paid a 20% deposit, unchanged since February.
First-time buyer deposits are lower than the high of 25% seen throughout 2009, but higher than the historic norm of 10%.
Home movers took out a mortgage worth 70% of their property's value for the second month. This figure has barely moved over the last few years.
Home movers, lending and affordability
The popularity of fixed-rate mortgages continued to edge up in the second quarter, with 63% of borrowers opting for a fixed rate, compared to 60% in the first quarter and just 46% in the second quarter of 2010.
While no immediate rise in interest rate rises is expected, uncertainty over when the first rise will come may have been incentivising borrowers to fix their rates in the second quarter.
The trend away from interest-only mortgages continues for all borrowers, with 87% of house purchase loans in June taken out on a repayment basis, up from 86% in May.
This is likely to persist as future home movers and remortgagers continue to take out future mortgages on a repayment basis.
Commenting on the data, CML director general Paul Smee said:
"Whilst there are clearly financial uncertainties ahead, it is encouraging to see more house buyers surfacing at the start of summer.
"Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while."
Chris Gardner, director of independent mortgage broker, Obligo.co.uk, said:
"The June spike in first time buyer mortgage advances reflects the surge in products at higher LTVs and the more favourable criteria of lenders.
"There are now plenty of competitive 90% products in the market and we are also seeing more lenders move into higher LTVs, which is driving rates down further.
"In recent months, more lenders have even returned to the 95% LTV range, although these products are still in relatively limited supply.
"What we have also seen in recent months is the gradual realignment of vendor and purchaser expectations.
"Sellers are increasingly accepting that they have to lower their asking prices if they want to find a buyer, while buyers understand that they cannot go in with unrealistic offers.
"The result of this realignment is increased transactions at all LTVs, which are reflected in the June data."
Paul Hunt, managing director of Phoebus Software said:
“The rise in the number of loans to first-time buyers shows improving affordability of both properties and mortgages is having an impact on lenders’ confidence.
"With rates set to remain low for the foreseeable future, we can expect mortgage rates to sink even lower than Chelsea BS’ 5 year fix at 3.39% announced last week.
"Mortgage repayments fell in June as a proportion of borrowers’ incomes and as this is set to continue borrowers will be emboldened to lend more money to first time buyers at higher LTVs. This could be just the boost the property market has been crying out for in the last year.”
Nick Hopkinson, Director of property company PPR Estates, comments:
“As the post credit-crunch lending slump continues it is no surprise to see that the total value of home purchase mortgages taken out in June is 13% lower than even last year’s amounts.
"The monthly number of UK property sales remains roughly half the level needed for a properly functioning market to flourish.
"In a world where western Government debt viability is constantly being questioned by the Bond markets and economic uncertainty abounds at a corporate and personal level it is totally understandable that potential home buyers are sitting on their hands and mortgage lending continues to shrink."
