House purchase lending hit the highest level for six years in September, even before the Help to Buy 2 scheme has launched.
The number of loans rose 36% in the last 12 months to 68,000, the best figure since February 2008, according to the latest Mortgage Monitor from chartered surveyor e.surv.
The 68,212 loans advanced to homebuyers in September represents a rapid recovery in just 12 months, up from 49,987 homebuyer loans in September 2012.
Lending to buyers with small deposits also surged to a post-financial crisis record. There were 8,185 loans with LTVs of 15% or less in September, 60% more than 12 months ago. That is the best figure since September 2008.
It was also 11% more than in August, when there were 7,343 loans.
Richard Sexton, director of e.surv chartered surveyors, said: “The housing market is speeding back to recovery, and that’s before Help to Buy 2 even begins to kick-in.
"In September, more people were buying a house than at any point in the last five-and-a-half years. And the rate of recovery is increasing rapidly. Lenders are saying yes to more borrower applications, and are more willing to lend to borrowers with small deposits than they were last year.
"Our economy is the fastest growing in Europe – and it’s being driven by the recovery in the housing market. The introduction of Help to Buy 2 could floor the accelerator, and we could see unprecedently quick growth.”
The average mortgage rate for first-time buyers has fallen below 4.00%, with rates falling in every month of the year to July, according to e.surv’s parent company, LSL Property Services.
In the year to July, the average mortgage rate for first-time buyers fell from 4.66% to 4.31%. This has triggered a surge in first-time buyers entering the housing market, which has boosted the number of house purchase approvals.
The North remains the hotspot for high LTV lending. In September, 25% of all house purchase approvals in the North East and Cumbria were to borrowers with a deposit of 15% or less.
This compared to just 6% in London.
Sexton added: “Help to Buy is important for the whole country. Lending levels and house sales may be recovering, but first-time buyer numbers are still short of their pre-2008 levels.
"It will help people in areas where incomes are low, and will also help people in areas like the South East, where house prices are so high that even people with well-paid jobs aren’t getting a look-in."
Comments