Mortgage blog: Homebuyers push mortgage lending to five-year high

Posted 24 October 2013

A substantial increase in the number of people buying homes has pushed mortgage lending in the UK to its highest level in five years. New data from the Council of Mortgage Lenders shows that £49.3bn was advanced between July and September, the highest figure since the third quarter of 2008.

Experts believe that the mortgage market is now showing clear signs of a recovery with lending expected to continue rising as a result of the government's new Help to Buy scheme.

Mortgage lending rises with Help to Buy set to further drive the market

The Council of Mortgage Lenders data shows that gross lending between July and September rose 32% on the £37.3bn lent in the third quarter of 2012. The gross figures show how much new money was advanced to people buying a new home, plus the amount of money lent to homeowners who remortgaged their existing debt.

Richard Sexton, director of e.surv chartered surveyors, said there has been a "quantum leap" in mortgage lending in the last year.

He says: "House purchase lending is at its highest for 68 months, and high loan-to-value [LTV] lending is 60% higher than this time last year. The whole market has moved out of the shadow of the financial crisis, and the sun is beginning to shine on borrowers again. Mortgage rates are likely to remain at rock-bottom for the next three years, lenders are more willing to advance high-LTV loans, and Help to Buy will open the door to borrowers who are struggling to build a deposit."

The Help to Buy scheme is designed to help first-time buyers and existing property owners and will allow borrowers with a 5% deposit to buy a home worth up to £600,000.

Bob Pannell from the Council of Mortgage Lenders remarks: "It may be several months into 2014 before we get a true gauge of the scale and reach of Help to Buy. For now, the scheme has launched against an already recovering UK housing market with several quarters of improving credit availability, growing competition, and strengthening demand."

Keith Osborne, editor of, says: "Much of this rise in mortgage lending has been because of homebuyers rather than remortgage activity. With borrowers now able to access a wider choice of 95% mortgages thanks to Help to Buy, I expect to see lending increase further at the end of 2013 and into 2014. There is clear evidence that house prices are starting to rise across much of the UK and increased access to mortgage finance will certainly help unblock the property market."

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