The three-month annualised growth rate was 2.3%. M4 lending excluding intermediate OFCs fell by £11.1 billion in August, having been on average unchanged in the previous six months. The three-month annualised growth rate was -4.2%.
The household sector’s holdings of M4 increased by £2.5 billion in August, compared to an average monthly increase of £1.2 billion in the previous six months.
The annual growth rate was 2.2%. M4 lending (excluding the effects of securitisations etc) to the household sector rose by £0.8 billion in August, similar to the average monthly increase in the previous six months. The annual growth rate was 0.8%.
Private non-financial corporations’ holdings of M4 rose by £0.8 billion in August, compared to an average monthly decrease of £0.1 billion in the previous six months.
The annual growth rate was -1.4%, the lowest since May 2009. M4 lending (excluding the effects of securitisations etc) to PNFCs decreased by £2.7 billion in August, compared to an average monthly decrease of £1.0 billion in the previous six months.
The annual growth rate was -2.5%.
Holdings of M4 by non-intermediate other financial corporations decreased by £2.8 billion in August.
The annual growth rate was 5.5%. M4 lending (excluding the effects of securitisations etc) to NIOFCs fell by £9.2 billion in August. The annual growth rate was -4.2%, the lowest growth rate in the series since June 2011.
Brian Murphy, head of lending at independent mortgage broker Mortgage Advice Bureau, said:
"The increase in house purchases is mildly encouraging. We're still down in historical terms, but it's a step in the right direction.
"It reflects both the increased availability of mortgages at higher LTVs and the competitiveness of many products now in the market.
"With some exceptionally competitive fixed rates on the market at present, many people are moving off their SVR despite the fact rates look set to remain on hold for at least another 12-18 months.
"After all, an extremely low five year fixed rate will protect borrowers if rates do start to rise in two years' time.
"Other factors in the rise in mortgage activity are that people are once again seeing bricks and mortar as safe compared to the markets and, if they have money eroding in deposit accounts, want to do something with it.
"There has also been a rise in landlords moving back into the market in larger numbers to monetise soaring rents."
Paul Hunt, managing director of Phoebus Software said:
“The fastest growth in August was for remortgage approvals which were up by 9%, as existing homeowners are taking the opportunity to lock themselves into the very low fixed rate deals currently on offer.
"But lenders haven’t left those looking to finance new purchases in the cold either. House purchase loans were up 5% last month as the affordability of finance has improved lenders’ confidence.
"Although there’s a very long way to go, the return of 100% mortgages, consistent lending at higher LTVs mean hoping for a market recovery in the next few months is by no means pie in the sky”.
David Brown, commercial director of LSL Property Services, comments:
"The increasing level of house purchase lending should provide reassurance for both home buyers and for would-be landlords, and demonstrates that banks and building societies do have the appetite to lend.
"While would be buyers make take comfort from the up-tick, demand for buy-to-let has been a key driving force behind the improved lending picture in August.
“Despite the recent withdrawal of quite a few cheaper rates in the last week, there are still more than double the number of buy-to-let products on the market compared to last year, and demand for finance from would-be investors remains strong.
"With gross yields stubbornly remaining above 5%, demand at an all-time high, and average rents climbing as high as £713 per month, many investors are making hay while the sun shines and this has been reflected in an expanding buy-to-let mortgage market.
"However, we don’t foresee a dramatic and sustained improvement in the level of lending across the wider market in the foreseeable future.
"The outlook for the economy has worsened in recent months, and many banks still must repay money they owe the government. Against this backdrop, it’s unlikely many will be able to vastly up their commitment to mortgage lending in the medium-term.”
David Whittaker, managing director of Mortgages For Business, said:
“The late summer heat-wave has brought good news for the lending market and whilst buy to let lending to individuals has been lumped in with the total figures, we all know that it’s most likely the professional investors who are making hay while the sun shines.
"Remortgaging activity has probably increased because landlords have refinanced to expand their portfolios and house purchase figures have risen as they use this equity to snap up properties as prices sit idle and rents soar.
"Until reporting on buy to let lending to individuals is published monthly instead of quarterly, it remains difficult to make real sense of these figures.
"However, the likelihood is that the lending market is being propped up by the residential investment sector particularly with so much uncertainty surrounding the economy and first time buyers largely locked out the of market.
"The UK’s heat-wave might not last much longer, but landlords will be enjoying their Indian summer for a while yet.”
