Mortgage lending holds up in September

Latest figures from the Council of Mortgage Lenders (CML) show that in September, one third of first-time buyers benefited from the current stamp duty holiday.

There were 6,200 first-time buyer loans for properties priced between the old starting rate of £125,000 and the temporary threshold of £175,000, representing 32% of 19,700 first-time buyer loans approved.

September 2009 saw lenders sanction 50,600 loans for house purchases in total, up 2% on August and 43% on September 2008; remortgage volumes rose 10% on August, to 33,000, but were down 48% on a year earlier.

According to the CML: “House purchase lending has now increased year-on-year for three consecutive months (following 25 consecutive year-on-year monthly falls) whilst remortgaging has continued its annualised decline, although the rate of decline moderated in September.”

The proportion of income spent on mortgage interest payments by first-time buyers stood at 15.1% in September, down from 15.3% in August and 19.8% a year earlier.

For homemovers, the proportion remained unchanged month-on-month at 11.4% having fallen from 16.9% in September 2008.

Commenting on the figures, CML economist Paul Samter warns that the end date for the stamp duty concession in December could see levels of activity at the lower end of the market sustained at a traditionally quiet time of year.

However, he adds “the corollary will be lower activity in early 2010 as transactions are ‘bunched’ in 2009″.

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