First-time-buyer activity helped sustain lending for house purchase in June, according to the Council of Mortgage Lenders (CML).
Lending to first-time-buyers was at its highest since July 2010, with the exception of March this year when the market was skewed by the stamp duty concession.
However, a contraction in remortgaging led to a decline in lending overall, with gross lending at £11.7 billion, 6 per cent lower than in May when the total was £12.5 billion. It was also down 7 per cent year-on-year.
There were 47,500 house purchase loans granted in the month, up 1.7 per cent on May, but down 0.8 per cent year-on-year.
Meanwhile, the value of house purchase loans was £7.1 billion, which was up 1.4 per cent on both last year and last month.
CML director general Paul Smee said: “Lending figures have see-sawed in the first half of the year, and we may see more fluctuations in the coming months as the effects of the Olympics and other special events in the UK this year are reflected in our lending numbers.
“Within that broader context, first-time buyer activity is showing some signs of resilience as we move away from the obvious effects of the stamp duty concession, a trend that it would be good to see maintained.”
Head of lending at Mortgage Advice Bureau Brian Murphy added: “After a strong performance in May, June was a slower month for the mortgage market. However, our data shows the rollercoaster ride continued in July, with house purchase activity bouncing back and purchase activity up 13 per cent on June.
“We saw something of a price war among lenders in July, with HSBC leading the way back below the psychologically important 3 per cent on five-year fixed rates. They’ve now been followed by others and average rates are coming down in the 90 per cent loan-to-value sector too which will help boost first-time buyer numbers in the coming months.”
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