Mortgage lending picked up in August compared with the same month last year, with buy-to-let lending posting a rapid increase.
Lending to landlords continues to rocket with the amount of buy-to-let mortgages jumping by a huge 40 per cent year on year, with 22,200 mortgages approved, trade figures released today reveal.
Loans to property investors for sales rang in at £1.4billion in August, while remortgaging was worth another £1.9bn, according to the Council of Mortgage Lenders (CML).
In contrast, mortgages extended to first-time buyers crept up by just five per cent over the same time period to reach £4.2bn, while home mover loans increased by eight per cent to £7.1bn.
All sectors registered a monthly dip from July to August, but the CML said this is a normal season trend.
“Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year-on-year growth, and we expect this to continue over the coming months,” said CML chief economist Bob Pannell.
In the coming months experts are predicting lending to remain strong, particularly as mortgage rates are tipped to stay low for some time yet.
House prices, on the other hand, are expected to continue to rise.
“We expect house prices to rise 7 per cent in 2015 and then by 6 per cent in 2016,” said Howard Archer, chief economist at IHS Global Insight.
“Housing market activity will likely be supported by largely helpful fundamentals, notably stronger earnings growth, high employment, elevated consumer confidence and still very low mortgage interest rates. A strengthening buy-to-let sector is also supportive to higher house prices.”
He added that the limited supply of properties onto the market was also pushing prices up.
Despite the sustained rise in sales, transaction volumes have still only reached 60 per cent of their pre-crash levels.
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