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House purchase lending higher this year than 2016

Fresh data from UK Finance has found that borrowing and lending for house sales increased in both value and volume in August 2017 when compared to last year and the previous month.

First-time buyers (FTBs) borrowed £5.7 billion in August 2017, 16% more than in July and 12% more than in August last year. Roughly 34,400 mortgages were taken out in total, 14% up on last month and 9% more year-on-year.

Meanwhile, home movers took out 38,500 loans, up 17% on July and 13% on August 2016. This equated to £8.4 billion, 18% more than in July and 20% more than in August last year.


Both the number of people remortgaging and the value of lending declined, down 4% in July but 8% more than August 2016. The number of people remortgaging totalled 36,700, down 1% on July but 5% higher than a year ago.

Buy-to-let lending, however, had the biggest decrease, totalling £3.1 billion, down 3% on July 2017 and the same as August last year. This equalled 20,400 mortgages taken out, the same as in July but 4% more than in August last year.

“Activity picked up in August, and recent resilience ensured that borrowing by home movers was at its highest since March 2016, when transactions were boosted by an imminent increase in stamp duty,” said June Deasy, UK’s Finance’s head of mortgages policy.

She added: “Over the last 12 months, the number of people remortgaging has been higher than in any period since late 2009.”

“With mortgage rates close to historic lows and the likelihood of a rise in official rates moving closer, the popularity of remortgaging looks set to continue.”

Household income taken up by mortgage payments was boosted for FTBs in August 2017 (17.5%). However, this didn’t change for movers (17.6%).

FTBs borrowed an average amount of £140,035 in August 2017, up from £138,999 in the preceding month. Similarly, the average amount borrowed by movers increased from £180,000 to £182,750 between July and August.

Borrowing for house purchases increased by 11% in August this year, despite being 5% lower than in July. However, borrowing for house sales by buy-to-let landlords remained at a lower level than before the initial rise of stamp duty rates last year.


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