A rise in mortgage lending in November has been welcomed as a sign that the market is holding up well amid the economic worries.
Data published by the Council of Mortgage Lenders last week shows there were 47,000 loans for house purchase worth £6.9bn advanced in November 2011, up 3% by number and 5% by value compared with November 2010, and up 4% by number and 5% by value compared with October 2011.
This is only the second month in 2011 to see a year-on-year rise in house purchase lending.
Remortgage lending also rose in November, by 2% in number and 5% in value year-on-year to reach 31,200 loans worth £4bn. This represents a rise of 6% by number and 8% by value compared with the previous month.
Paul Smee, director-general of the CML, says: “This rise in lending towards the end of 2011 is a welcome indicator for the industry, considering that sector confidence has been weak due to fragile economies both at home and in the eurozone.”
Paul Hunt, managing director of Phoebus Software, says the data demonstrates a remarkable resilience among lenders in the face of the eurozone crisis.
He adds: “That’s not to say rising LIBOR, along with a seemingly worsening situation on the Continent, won’t force lenders’ hands as the year goes on, but it’s encouraging that lenders have shown themselves willing to support borrowers wherever they can.”
The CML statistics also reveal that first-time buyers took out 17,300 loans worth £2.1bn in November 2011, up 4% by volume and 5% by value compared with both October 2011 and November 2010.
First-time buyers accounted for 37% of the market in November, the same proportion as the previous month.
Charles Haresnape, managing director of residential mortgages at Aldermore, says: “It is encouraging that house purchase lending was up in November. However, more importantly, first-time buyers rose in numbers and retained their market share.
“There will be many headwinds during 2012 but at least affordability is strong and now it is all about consumer confidence.”