The real estate market in the UK was boosted by first-time buyer activity in June, according to data published by the Council of Mortgage Lenders. Their figures show lending for this month was the highest since July 2010, with the exception being March this year as this month marked the end of the stamp duty concession.
Although this increase in first-time buyer purchases helped boost lending for property buying, this was balanced out by a contraction in remortgaging leading to an overall decline in lending. Gross lending for June was £11.7 billion, 6% lower than in May, and 7% lower than in last June. Lending for house purchases showed a modest increase in June, with 47,500 loans worth a total of £7.1 billion. This is up 2% by volume and 1% by value on the previous month.
However year-on-year lending to house purchasers was flat, up 1% by value but down 1% by volume. There were 23,400 remortgaging loans worth £3.1 billion, which is 21% lower by volume and 18% lower in value than in May, and down year-on-year by 25% by volume and 18% by value. It’s thought this may be led by expectations that borrowing rates could fall later on in the year.
The number of loans taken out by people moving in June totaled 28,200, worth a total of £4.7 billion which is around 3% lower in number than in May, and in June last year. However during the second quarter movers took out 79,900 loans, which is 13% more than in the first three months of the year, and this activity by movers was the main reason for a 6% increase in the number of loans for house purchase during the second quarter. First-time buyer numbers for the first half of the year have fluctuated due to the changes in stamp duty.
Paul Smee, director-general of the CML commented on the data saying “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 the 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.”