"June's figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers."
First-time buyers borrowed £5.9bn in June - up 26% on the previous month and 9% on June 2016 - as the buy-to-let market has continued to stagnate, according to UK Finance data, formerly published by the CML.
First-time buyers took out 36,000 loans, up 22% month-on-month and 6% year-on-year, reaching its highest level since November 2006.
While first time buyers borrowed 26% more in June compared to May, buy-to-let lending rose just 3% with the majority of buy-to-let lending being remortgages.
Home movers also saw strong June figures, with lending rising 26% month-on-month to £7.8bn.
Home-owner remortgage activity totalled £6bn, up 5% by value on May and 7% on a year ago.
Paul Smee, Head of Mortgages at UK Finance, commented: "June's figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers.
"Buy-to-let activity remains subdued compared to its 2015 peak but consistent month-to-month since stamp duty changes in April 2016. But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017. A slightly lop-sided market could well show some growth in house purchase lending but alongside reduced remortgage and buy-to-let activity."
Liz Syms, MD at Connect for Intermediaries, said: “If the intention of the additional stamp duty on buy-to-let was to slow the amount of purchases by landlords and increase the number of first time buyers then based on today’s UK Finance figures you would have to say that it is working. First time buyers borrowed 26% more in June compared to May while buy-to-let lending rose only 3% in comparison with the majority of buy-to-let lending being remortgages.
“There may well be a small surge in purchases by portfolio landlords in September ahead of the new rules that will make it tougher for them to borrow after the 1st October, then I expect to see a slight dip again as the new regulations bite - until people get used to them and they become the new normal."
Richard Pike, Phoebus Software sales and marketing director, added: “It appears that the government plans to get more first-time-buyers onto the property ladder are starting to bear fruit. Activity in this area of the market reached its highest level since November 2006, with 36,000 purchases in the month. However, where there are winners there are also losers and the buy-to-let market continues to suffer from the same government intervention. Nonetheless, it is encouraging, given the recent political upheaval, to see people moving again.
“There is plenty of talk about the government’s plans to ‘fix’ the broken housing market and perhaps we are starting to see a shift. The one thing that does seem to be happening is a halt in excessive house price rises, which must be a good thing for long term affordability.”