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|Enterprise Finance comments on today's CML Monthly Lending Trends statistics|
|Thursday, 15 October 2015|
Danny Waters, Chief Executive Officer of Enterprise Finance, said:
“While it is traditional that the first-time buyer and home mover market experiences something of a summer slowdown – which goes some way to explaining August’s figures – it is more of a surprise to see remortgage activity decline so sharply, especially with interest rates historically so low. This may be the first sign that competitive products aren’t quite as easy to come by as they were earlier in the year and that mortgage lenders are casting increasingly nervous glances the Bank of England’s way.
“If homeowners are looking to access capital, remortgaging isn’t the only way of doing this and second charge mortgages are an increasingly common method of freeing up equity. The latest Enterprise Finance Secured Loan Index shows that the sector is closing in on £1bn of annual lending as more homeowners realise the potential of the product. With the loans set to come under the Mortgage Credit Directive from March 2016, their popularity is only set to increase.”
CML Monthly Lending Trends, August
First-time buyers, home movers, home-owner remortgage and buy-to-let all saw a monthly decline in lending in August but an uptick (significant for buy-to-let) compared to August 2014.
This is a normal seasonal trend, with August typically less strong for mortgage completions.
The underlying picture is of improvement in lending levels on a year-by-year basis.
House purchase lending in the UK saw a month-on-month decline by volume and by value for the first time since April this year. However, this was the third consecutive month that lending for house purchase increased year-on-year by volume and by value. This was the highest house purchase lending activity level for the month of August since August 2007. However, volume levels this month were still only 60% of what they were in August 2007.
Remortgage activity dropped month-on-month in August 17% by volume and 18% by value compared to July. However, in parallel to house purchase activity, there was a year-on-year increase compared to August 2014 by volume and by value, up 11% and 20% respectively.
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