Call us today on 0141 552 9193
GLP News

News, Comment & Opinions on the latest legal stories

Glasgow Law Practice White

Practice made perfect

Small fall in mortgage lending for September

Loans for both house purchase and remortgage fell slightly in September, according to new data released by the Council of Mortgage Lenders.

Just over 48,000 loans were taken out for house purchase in September, worth £7.1 billion, down 2% by number and 5% by value compared to August but up 3% by number and value compared to September 2010.

The decline in house purchase lending in September was driven entirely by a drop in home mover activity. There were 30,100 loans to home movers in September (worth £4.9 billion), down from 31,400 (worth £5.3 billion) from August. But in contrast, first-time buyer numbers rose in September. The 18,200 loans (worth £2.2 billion) taken out by first-time buyers represented an increase from 18,000 (no change by value) on August.
 
Alongside the increase in activity, affordability continued to ease for first-time buyers. In September, interest on a new first-time buyer loan typically consumed 12.7% of the borrower’s income, down from 13.0% in August. This reflects the mortgage price easing, particularly in the 80%-90% loan-to-value bracket, that has accompanied greater loan availability at these levels. Home movers on average paid the lowest proportion of their income since monthly records began in 2002 (9.4%) on mortgage interest payments for the second month running.  

Since June, nearly all loans to first-time buyers (96%) have been taken out on a repayment basis. However the proportion of home mover and remortgage loans taken out on a repayment basis continues to increase. In September, 82% of home movers and 78% of remortgage loans were on a repayment basis, up from 81% and 76% respectively in August.