The impact of Mortgage Market Review has seen “a gentle dampener” on mortgage lending, says the Council of Mortgage Lenders (CML) in its latest lending figures.
Lending in June was driven mainly by lending for house purchase, rather than remortgaging. Buy-to-let lending is also up as are loans to first-time buyers.
Total gross lending in June grew by 6 per cent in June to £17.9 billion -20 per cent up on June last year), according to the Bank of England.
The CML says there were 28,600 first-time buyer loans in June – 7 per cent more than in May, and 19 per cent up on June 2013.
Lending to home movers also grew, but by less. In June, the number of loans to movers was 31,900, 4 per cent up on the previous month and 11 per cent on June last year.
Remortgage lending remains muted compared with both first-time buyer and home-mover lending.
The number of remortgages in June was 1 per cent up on May but 8 per cent down on June last year, although the value (£3.7 billion) was up 6 per cent on both.
Buy-to-let lending grew 5 per cent over the month to £2.2 billion in June, though the number of loans was the same as May at 15,600.
Richard Sexton, director of e.surv chartered surveyors, says steadily growing first-time buyer demand is bolstering the housing market and lifting lending levels.
“Interest rates remain low, allowing first-timers to enjoy cheaper repayments and lock into affordable fixed-rate deals. And banks are offering a larger array of deals to support borrowers struggling to put together a large deposit to get onto the housing ladder.
He adds: “The regulations implemented in April ensure borrowers’ finances are put through their paces before any loan is offered – making sure they will withstand the eventual hike in the base rate.
“The bounce back in home lending shows that the temporary bottleneck caused by MMR has now been alleviated, and the market has returned to steady, healthy home lending volumes.”
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