Lending for house purchases rose in November, CML says

Date: Monday 16 Jan 2012

Lending for house purchases experienced a year-on-year rise for only the second time in 2011 last November, according to the latest data from the Council of Mortgage Lenders (CML).

Loans for house purchase totalled 47,000 (worth £6.9bn) in November, a 4% rise (5% in value) from October and a 3% rise (5% in value) compared to November 2010.

Remortgaging activity also increased. There were 31,200 loans (worth £4bn), up from 29,500 (worth £3.7bn) in October and 30,700 (worth £3.8bn) seen in November 2010.

First-time buyers continued to see a decline in the proportion of their income accounted for by mortgage interest payments – 12.2% in November compared to 12.3% in October and 13% in the previous month of November.

Mortgage interest payments for home movers, however, stayed static at 9.2% for the second month, still the lowest proportion in nine years.

CML director general Paul Smee commented:

"A rise in mortgage lending towards the end of 2011 is a welcome indicator for the industry considering confidence has been weak due to fragile economies both at home and in the Eurozone. We should expect a further increase in first-time buyer activity over the next few months as they push through their purchases to take advantage of the stamp duty concession before it ends in March."

For his part IHS Global Insight’s chief UK economist, Howard Archer, said that:

"The housing market remains very low compared to long-term norms," he pointed out, adding that mortgage finance is still difficult to obtain for many people.

"We continue to expect house prices to fall by 5% in 2012, despite the CML data. And we still believe that there are serious downside risks to this forecast."

AB

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