The total of 38,300 house purchase loans, worth £5.7bn, were advanced in January, representing the strongest start to a year since January 2008 when 47,800 loans were advanced.
Although this latest figures reveals a 17 per cent drop on the 45,900 house purchase loans taken out in December, the number advanced was still 11 per cent higher than compared with January 2011.
CML director general Paul Smee says: “Seasonal factors clearly had an impact on lending figures in January, but it still remains the best start to a year since 2008. Mortgage finance is available and lenders are open for business, allowing more borrowers to take the step into homeownership or move house in line with their needs.”
A total of 15,900 loans, worth £2bn, were advanced to first-time buyers in January, representing a 24 per cent increase on the 12,800 loans advanced over the same period last year.
First-time buyer activity accounted for 42 per cent of all house purchase loans for the third consecutive month. The average loan amount for these buyers came down slightly, from 3.28 times income in December to 3.2 times and the average LTV remained at 80 per cent.
Legal & General Mortgage Club managing director Ben Thompson says: “It is clear that we are at a crucial stage of the housing market recovery. We have seen a variety of data suggesting that the market is ‘flattening out’ as a prelude to a slow and steady climb back to something which could be termed ‘normality’. This consensus on a return of positive sentiment to the market seems to be shared by the majority of sources including the CML today. Our own data in conjunction with Cebr shows that the value of the average home is expected to return to pre-crisis levels of £227,000 by the year 2015, and to reach £254,000 by 2017.”
A total of 22,300 loans, worth £3.7bn, were advanced to home movers in January and £3bn was advanced for remortgaging.