Mortgage approvals in January were at their highest level since before the financial collapse, according to new figures from the Council of Mortgage Lenders (CML).
The month of January saw 38,300 mortgages approved which is up 10.7% from the same period last year, but down 16.6% from the previous month.
The second monthly drop in a row was merely due to seasonal factors and not something more serious said CML and the annual rise was more important.
CML director general Paul Smee said,
“Seasonal factors clearly had an impact on lending figures in January, but it still remains the best start to a year since 2008. Mortgage finance is available and lenders are open for business, allowing more borrowers to take the step into homeownership or move house in line with their needs.”
The report from CML found the biggest reason for the rise was first-time buyers, with 15,900 mortgages approved, which was a 24.2% increase from the previous year.
It was also the third consecutive month which saw first-tme buyers make up 42% of all house purchases, showing how important they have become to the market.
There was also a 2.8% rise over the year in the number of people moving house, with 22,300 mortgages approved, but a 15.5% drop from December.
The table above shows that the average loan to value has not changed over the year, however the value of loans rose by a quarter over the period.
Richard Sexton, director of e.surv chartered surveyors said,
“Life is becoming easier for first-time buyers,”
“Although deposit requirements are still high, rates are lower and banks are more willing to lend to lower income borrowers.
“Funding for Lending can take some of the credit: it is plugging the punctures in the mortgage market and stopping it from falling flat.”
The cost to rent in England and Wales fell for the fourth consecutive month in February, it was revealed earlier today by LSL property Service.
The drop comes after CML previously announced a rise in buy to let mortgages throughout 2012, which also helped increase lending rates.
The housing market has been given a boost by the Funding for Lending Scheme, however the economy looks like it may enter a triple dip recession which could impact the market.