The number of loans taken out by home movers rose by 8 per cent compared to June and by 4 per cent on July last year, the latest figures out from the Council of Mortgage Lenders reveals today.
Home movers were advanced 30,500 loans worth £5.1bn in July, with the increase contributing to a jump in house purchase lending.
This continued an upward trend in house purchase lending following the expected drop in April, linked to the end of the stamp duty concession in March.
A total of 49,500 loans were advanced worth £7.6bn, which CML says marks a 5 per cent rise compared to both June and the same period last year, as well as a 7 per cent rise in value on the previous month.
The effect of this increase was a rise in gross lending. Gross lending totalled £12.7bn in July, a 7% increase from £11.9bn in June and up by 2 per cent compared to July last year.
Lending to first-time buyers remained resilient in July, while not matching the growth shown by home mover lending. A total of 19,000 loans were advanced to first-time buyers, down from 19,200 in June, but stronger than at the same time last year.
These loans were valued at a total of £2.5bn, a slight increase on the June figure, and the largest monthly total since March when lending was boosted by the end of the stamp duty holiday.
Despite an increase in total lending value and a fall in the number of loans, the median loan size for first-time buyers decreased in July compared to June.
This was caused by an increase in the number of first-time buyers purchasing more expensive properties, with 14% of first-time buyers buying homes worth over £250,000 compared to 12% in June.
Remortgage lending rose slightly in July compared to June, but was 20 per cent down on the same period last year. Lending totalled £3.2bn in July, up from £3.1bn in June but still well short of the £4bn advanced for remortgaging in July 2011.
The CML’s director general Paul Smee says: “July’s figures show a gradual improvement in the market with lending approaching the sort of levels we saw at the end of the stamp duty concession.
“While overall market conditions remain tight, new initiatives such as Funding for Lending and NewBuy have the potential to help lending to continue to ease gradually.”