CML reports increase in mortgage lending

| November 12, 2012
CML reports increase in mortgage lending

Mortgage lending increased by 13 per cent in the third quarter according to the latest figures from the Council of Mortgage Lenders, suggesting that the Funding for Lending (FLS) scheme is having a positive effect.

August was a particularly strong month, with 53,900 loans advanced, including 20,700 loans to first-time buyers.

The strong August figures were followed by a slump in September when 44,400 loans were advanced, with 17,900 of these made to first time buyers.

This was significantly lower than September 2011, when 48,800 loans were advanced.

Paul Smee, CML director general, said: “While lending in September was slow after a particularly strong August, quarterly figures suggest that the underlying picture is more positive.

“An increase in house purchase approvals indicated by the Bank of England in September suggests that we may see a return to growth in coming months, but it may take some time before a boost from the Funding for Lending scheme is reflected in house purchase completions.”

The FLS was launched by the Treasury and the Bank of England to offer low-cost funding to lenders on the condition that it is passed on to individuals and businesses.

Around 30 lenders have signed up to the scheme.

There was an increase in buy-to-let mortgages in the third quarter, with their total value reaching £4.2 billion, 8 per cent higher than in the previous quarter.

The number of loans advanced in the third quarter totalled 34,400, 2 per cent higher than in the previous quarter.

For the first nine months of 2012, the total value of buy-to-let lending was £11.8 billion, an increase of 19 per cent compared with the same period in 2011.

However, buy-to-let lending is still substantially below its pre-credit crunch levels.

Paul Smee said: “Buy-to-let lending is continuing to recover, and to grow in line with expectations.

“As well as continuing to fund owner-occupation, lenders are contributing to the expansion of a strongly growing rental sector, helping to deliver choice and mobility for tenants.”

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