Mortgage Lending Rising Again

HAMISH_MCTAVISH

The number of mortgages taken out to fund house purchases increased in June, according to figures from lenders which suggest that new rules on loans have not dampened the property market.

Data from the Council of Mortgage Lenders showed that 60,500 house purchase loans worth a total of £10bn were taken out during the month, a rise of 5% by number and 6% by value on May's figures. Compared to June 2013, the figures were up by 15% and 23% respectively.

More than half of those loans were taken out by home movers, who accounted for 31,900 of the mortgages advanced, 4% up on May, however the number of first-time buyers showed a bigger month-on-month increase, rising by 7% to 28,600.

Despite the introduction of new affordability tests in April, which force lenders to check applicants' outgoings as well as their income and to stress-test their borrowing to ensure they can still afford repayments if interest rates rise, the amounts borrowed by first-time buyers increased in June.

The average first-time buyer borrowed 3.47 times their gross income to fund their purchase, compared to 3.46 in May, while the typical loan size increased by more than £2,000 to £123,865. The typical gross income of a first-time buyer household also rose, to £37,000 from £36,500 in May.

Paul Smee, director general of the CML, said: "For the second month running since new FCA rules took effect, lending characteristics remain similar to the market beforehand.

"We now feel confident that, as we would hope, the mortgage market review [MMR] effect is more gentle dampener than hard brake."

Investors' appetite for property continued to grow, with the CML reporting a 23% year-on-year increase in the number of buy-to-let loans. A total of 15,600 landlord mortgages were advanced, worth £2.2bn.

http://www.theguardian.com/money/2014/aug/11/june-mortgage-figures-property-market

Looks like MMR caused delays rather than a reduction in lending.

gbsilp

HAMISH_MCTAVISH wrote: »

http://www.theguardian.com/money/2014/aug/11/june-mortgage-figures-property-market

Looks like MMR caused delays rather than a reduction in lending.

I may be wrong but I doubt that all these mortgages that were drawn down in June were applied for after MMR was introduced. I think we'll have to wait a few months for when the majority of pre-MMR mortgages are drawn down (or the mortgage offer has lapsed). Do they provide stats on the average time between application and drawdown?

There could also have been a bump in demand as people who knew they wouldn't get a post MMR mortgage applied just before rules came in and have been drawing down, similar to the surge just before MIRAS was withdrawn. Like I said, I don't think we'll know either way for a few months yet.

Minrich

and look what happened to House prices when MIRAS actually finished , same again ? Not so drastic but a correction in values i am sure over the next few months .

ZMaguire

When this house of cards collapses it is going to be epic. Popcorn please.

Bubble_and_Squeak

these figures certainly contradict what i'm seeing on the ground here in east london so i assume there is a time lag factor in play

supply up and prices notably down

walthamstow in particular is looking very crashy in terms of asking prices

System

Bubble_and_Squeak wrote: »

these figures certainly contradict what i'm seeing on the ground here in east london so i assume there is a time lag factor in play

supply up and prices notably down

walthamstow in particular is looking very crashy in terms of asking prices

People have been saying this since 2009.

AndyGuil

Bubble_and_Squeak wrote: »

these figures certainly contradict what i'm seeing on the ground here in east london so i assume there is a time lag factor in play

supply up and prices notably down

walthamstow in particular is looking very crashy in terms of asking prices

Average asking price in London is up 0.85% MoM. This time of year always has peak supply and lowest demand however we are seeing a sudden jump as MMR mortgages are pouring through now.

padington

AndyGuil wrote: »

Average asking price in London is up 0.85% MoM. This time of year always has peak supply and lowest demand however we are seeing a sudden jump as MMR mortgages are pouring through now.

When's the best time of year to sell a house Andy and when's the best to buy ?

AndyGuil

padington wrote: »

When's the best time of year to sell a house Andy and when's the best to buy ?

Best time to buy is now. Best time to sell is just after new year. There is also an opportunity just after summer but before October as after this you are getting close to Christmas when the market slows again. Competition is high for buying so seasonal changes in demand are only of slight benefit.

padington

ZMaguire wrote: »

When this house of cards collapses it is going to be epic. Popcorn please.

It's the collapse of finding anywhere decent for cheap, nothing else. Thinking you'll be able to pick up one beds in Islington for 50k is like hoping the price of pint will come back to £1. It's delusional.

I was a gold bug for a while, what I realised was that the 'theory' is right in some respects, we will see big economies demise over time and that will lead money printing over time & people will take refuge in real things more and more as the systems slowly implode.

However property is the best form of commodity because it pays an income and it can give you a home. That's the bit the gold bugs failed to realise.

When the sh*t hits the fan, when the markets are crashing and the cashpoints have stopped giving out any money, the land under your little fortress will still be yours and sanctuary in that fortress will be increasing welcome by friends and strangers.

Give me a garden with potential to make food, tree's for wood, neighbours with tools, no rent to pay or landlord wanting his fortress back in an emergency, beds to sleep family and guests and a place to coordinate the next plan of action.

Once that is in place, then let's talk gold or pounds or shares or bonds or shot guns.

Bubble_and_Squeak

AndyGuil wrote: »

Best time to buy is now. Best time to sell is just after new year. There is also an opportunity just after summer but before October as after this you are getting close to Christmas when the market slows again. Competition is high for buying so seasonal changes in demand are only of slight benefit.

are you for real???