House purchase lending rises
13th Jul 2012
House purchase lending in the UK increased substantially in May, according to new data from the Council of Mortgage Lenders (CML), which suggests that the slump in activity that followed the end of the first-time buyer stamp duty holiday appears to have been short-lived.
In May, house purchase lending increased by 36 per cent compared to April and 29 per cent compared to last May, while the number of loans also increased, by 33 per cent from April and 24 per cent from a year ago.
Remortgage lending also increased in May, with £3.5 billion advanced for this purpose, which was up from £3.1 billion in April but down from £3.8 billion 12 months ago when there was a greater expectation of interest rate rises.
The figures show that first-time buyer activity bounced back following the volatility of March and April, with 18,100 loans, worth £2.3 billion, advanced to first-time buyers in May.
This is up from 12,700, worth £1.5 billion, in April, and a 43 per cent rise, which returns first-time buyer lending back to a similar level seen in the second half of 2011.
Commenting on the data, CML director general Paul Smee said: "It is positive news for the market that the slump following the end of the stamp duty concession seems to have been short-lived. Lending is similar to late 2011 levels and showing a healthy improvement on the same time last year."
Posted by Staff Writer: Ewan Robertson
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