New home loan approvals up 16%
More good news on the housing market front with latest figures from the Council of Mortgage Lenders (CML) showing the number of loans approved for house purchases rising 16% in April, compared with March.
Loans to first-time buyers increased by 11% on March and the average deposit required stood at 25% (unchanged from February).
Those getting a foot on the property ladder borrowed an average £96,000 in April, while the average income multiple fell slightly to 2.96 times income, compared with 2.99 in March.
First-time buyers typically committed 15% of income to pay their mortgage interest in April, the lowest proportion since May 2004.
There were 22,100 loans to home movers compared with 30,600 in April last year; a typical home mover put down a 33% deposit and borrowed 2.63 times income, compared with 30% and 2.69 respectively, in March.
Home movers typically spent 11.3% of income on mortgage interest payments, the lowest proportion since November 2003.
Borrowers opted strongly for fixed rates, with 69% of house purchases funded with a fix, compared with 48% in January.
The average fixed rate in April was at its lowest since January 2004, at 4.83%.
The number of loans for remortgages continued to decline as borrowers reverted to lenders’ standard variable rates, some out of choice and others because they were unable to meet the stricter lending criteria attached today’s best deals.
In April, 31,000 remortgages were approved, 22% down on March and 65% down on a year earlier.
Gross mortgage lending for the month fell to £10.5 billion, down from £11.5 billion in March.
CML head of research, Bob Pannell, comments: “There are tentative signs of house purchase lending stabilising, but we need to see considerably higher transaction levels to underpin house prices.”