Mortgage lending 4% higher in February
Mortgage lending increased by 4 per cent in February, compared with the previous month, according to the latest figures from the Council of Mortgage Lenders (CML).
The number of loans made for house purchase increased to 36,600, representing a year-on-year rise of 17 per cent.
There was also growth in the number of first-time buyer mortgages, with 14,100 loans made to this group of buyers, worth £1.7 billion in total.
This was 8 per cent higher than in January and 18 per cent higher than in February 2011.
The CML warned that the figures reflect the rush to buy a property before the end of the stamp duty concession on first-time buyer properties.
CML director general Paul Smee said: “It is encouraging to see the continuing year-on-year improvement in house purchase lending.
“However it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government’s NewBuy scheme, available to all buying a new build property.”
Growth in the housing market could also be affected by higher borrowing costs for lenders, which has led to some mortgage rates being increased recently.
Yesterday the Independent reported that many people with interest-only mortgages could find themselves reaching retirement without having paid their mortgage off.
Based on an analysis of statistics from the Financial Services Authority, the Independent calculates that 60,000 of the 150,000 interest-only mortgages due to mature each year for the next eight years will be in shortfall.
From these, 42,000 will be held by people reaching the age of retirement.
Many people with interest-only mortgages are finding that the endowment or other investment they have taken out to cover the mortgage repayment, fails to do so.