Increase in Loans to Homebuyers
With house prices becoming more stabilised in recent months, June saw a 23% increase on approved home-buyer loans compared to the previous month, according to UK lenders.
The Council of Mortgage Lenders (CML) had some interesting figures to declare in the monthly release of figures. Interestingly, the total amount of approved home buyer loans, approximately 45,000, was only 6% down on June of 2008, and while the market seems to be evening off again, it is still a long way from a return to the housing boom of not so long ago.
The estimated 45,000 approved loans amounted to an estimated £5.9bn and the amount of loans was considered to be at its highest level since July of 2008, which was when the housing market was beginning to fall into dire circumstances.
Paul Samter, CML Economist, speaking to the BBC, said “Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity. There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels.”
While the average price of a loan for the purpose of purchasing a house rose from £105,000 in March to £111,000 in June, the amount required for a deposit is remaining static with most lenders requiring around 25%. This, of course, makes things a bit harder for first-time buyers to get on to the property ladder who now require a larger initial up front deposit.
Remortgaging also saw an increase in figures with an increase of 13% of 34,000 loans when comparing June with May.
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