August house purchase lending up 11 per cent year-on-year

According to latest data from the Council of Mortgage lenders, they took out 66,000 loans, which was a 13 per cent increase on the previous month and 9 per cent higher than on August 2015.

First-time buyers borrowed £5.1 billion, up 13 per cent on July and 24 per the same month last year.

This equated to 31,800 loans, up 12 per cent month-on-month and 19 per cent year-on-year.

Home movers borrowed £7.1billion, up 15 per cent on July and 3 per cent compared to a year ago. This represented 34,200 loans, up 14 per cent month-on-month and 2 per cent on August 2015.

Remortgage activity totalled £5.9 billion, down 2 per cent on July but up 41 per cent compared to a year ago. This came to 34,900 loans, up 4 per cent month-on-month and 40 per cent compared to a year ago.

Landlords borrowed £3 billion, unchanged month-on-month but down 12 per cent year-on-year. This came to 19,400 loans in total, up 4 per cent compared to July but down 13 per cent compared to August 2015.

Paul Smee, director general of the CML, said: “House purchase activity bounced back from a dip in July, reflecting resilience in first-time buyer activity. Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August’s base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months.

“Buy-to-let by contrast continues to operate at lower levels five months after the stamp duty change on second properties. This appears to be a long-term trend, and with lenders potentially tightening affordability checks ahead of the tax changes in April 2017, activity on the buy-to-let house purchase side may well remain at current levels.”

Both the number and the value of first-time buyer loans grew on a seasonally adjusted basis, as well as the unadjusted raw data. The monthly number of first-time buyers in August was the second highest of 2016.

The number of home mover loans was also the second highest monthly figure of 2016, after March, and the highest August level since 2013, but on a seasonally adjusted basis lending to home movers was weaker than to first-time buyers.

Affordability metrics for first-time buyers have remained relatively stable. The typical loan size increased to £136,300 in August from £133,000 in July, against average household income up slightly from £40,200 in July to £40,900 in August. This meant the income multiple was slightly up from 3.55 to 3.56.

The average amount borrowed by home movers in the UK increased to £175,000 in August from £172,000 in July, while the average home mover household income also increased to £55,400 from £55,000. The income multiple for the average home mover went from 3.29 to 3.27 month-on-month.

The number of home-owner remortgages rose to reach its highest monthly level since July 2009, although by value remortgaging was lower than the previous month.