Video transcriptA spike in mortgage loan lending was witnessed across the UK in August this year.
Figures from the Council of Mortgage Lenders revealed an 11 per cent annual upturn in borrower activity for homeowner house purchases via a mortgage loan during the month.
At the same time, first time buyer borrowing was up by 24 per cent year on year.
A total of 12.2 billion pounds were lent to homeowner borrowers during the month, while 5.1 billion was lent to first time buyers.
It marks a considerable upturn in activity over the last year and this was put down to a range of factors.
Firstly, a reduction in the UK base rate of interest following the result of the EU referendum in June has helped to make many mortgage offerings more affordable.
And secondly, ongoing government support for first time buyers to build sufficient deposits is helping to maintain a steady flow of new entrants into the marketplace.
The director general of the CML, said that mortgage sector activity bounced back in August from a dip that had been witnessed in the previous month.
It therefore represents resilience in the market that has not been seen for some time.
He continued: `The re-pricing of mortgages, following August`s base rate cut, should help to underpin a continuing, strong appetite for homeownership over the coming months.`
The average loan size for a first-time buyer in August stood at just over 136,000 pounds. Meanwhile, the typical loan for UK home movers reached 175,000 pounds.
On average, the amount being borrowed in comparison to annual take-home income for UK borrowers remained relatively stable at 3.56 times and 3.27 times respectively, for these two groups.
August was also a positive month for remortgage activity across the UK, with a 41 per cent annual upturn in activity to 5.9 billion pounds.
Buy-to-let lending did fall, however, with a 12 per cent reduction year-on-year.
The council of mortgage lenders cited the government`s stamp duty change on second properties, which was introduced earlier this year, as having a significant impact in this area.
In addition, he noted that a tightening of affordability checks for buy-to-let borrowers, ahead of tax changes in April next year, could also limit buy-to-let house purchases in the months ahead.
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