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UK Mortgage Lending Up 5% in July

The UK property market is still alive and kicking despite the doom and gloom reported in the press, as the Council of Mortgage Lenders (CML) report that the number of mortgages approved by banks increased by 5% in July, marking another upturn in the improving UK mortgage market.

Property investors are welcoming the news as they attempt to cash in on the current strong demand for rental property.

49,500 mortgage loans worth £7.6 Billion (GBP) were advanced for property purchases in July.

The latest figures from the Council for Mortgage Lenders (CML) also showed remortgage loan approvals increased by 3% to 24,100.

However, it isn’t all good news for property investors as First Time Buyer (FTB) activity also remained strong with 19,000 loans worth £2.5 Billion (GBP) were advanced to first-time buyers.

The FTB approval figures are down 1% on the year ,following the flurry of activity in March as buyers tried to beat the end of the stamp duty concession, but still stronger than at the same time in 2011.

Paul Smee, CML Director General, said “Initiatives such as the Government’s Funding for Lending and NewBuy schemes have the potential to help lending. July’s figures show a gradual improvement in the market with lending approaching the sort of levels we saw at the end of the stamp duty concession.”

The Bank of England said that successful mortgage approvals have dropped below the six-month average, according to new data.

The previous six-month mortgage approval average was 53,000 leading up to April 2012 but the figures only amounted to 51,823 successful mortgage applications being recorded, despite lending approvals being up by 1.5% from March to April of this year.

The stamp duty exemption that ended on March 24th 2012 is thought to have boosted the UK residential property sales market with many First-Time Buyers (FTBs) keen to snap up residential property and reap the benefits before the deadline date.

Figures also showed that more people remortgaged their homes in April 2012 with over 30,000 successful applications going through, which is above the recent average.

However, the UK property sales market is now expected to slow again, as banks become more reluctant to approve residential property mortgages and many have increased the criteria required for a successful mortgage application.

This has been put down to the difficult position the banks find themselves in amidst the current Eurozone crisis, the unstable UK and global economy and further regulations for the banks when it comes to lending.

Mortgage approvals, residential property sales and first time buyer numbers increase

Is the UK property market making a comeback?

January figures from a variety of trusted and respected sources offer a major boost for the UK property market as mortgage approvals, first time buyer numbers and residential property sales all increased during January.

Data gathered from the Council of Mortgage Lenders (CML), British Bankers’ Association (BBA), National Association of Estate Agents (NAEA) and HM Revenue and Customs (HMRC) is viewed as a major boost to the UK property market.

UK property buyers have been taking advantage of the two-year stamp duty exemption due to end in March 2012, with the number of First-Time Buyers (FTB’s) registering with estate agents also being the highest since May 2011.

The British Bankers’ Association (BBA) say that, 38,092 applications were approved in January, 34% up on the same time last year, and the highest figure seen in two years.

The National Association of Estate Agents (NAEA) figures show that 23% of overall property sales in January were made to First-Time Buyers, a rise from 21% in December, marking the third consecutive monthly increase.

Mortgage lenders have claimed that one of the driving forces behind the increase in activity has been the imminent end of the two-year stamp duty holiday for first-time buyers.

The Council of Mortgage Lenders (CML) reported that the £10.5 Billion (GBP) loaned in the form of mortgages during January 2012 was the sixth month in a row that the year-on-year figure has risen, and overall mortgage lending in January was up 10% on a year ago.

Despite general consumer caution around borrowing, first-time buyers have flocked to get on the property ladder, showing stamp duty was a major deterrant.

NAEA President, Wendy Evans-Scott, said: “The figures suggest that stamp duty is a key factor for those on tight budgets who are considering a property investment”.

Overall residential sales across the UK property market increased from 5% per branch in December to 6% in January.

The number of residential properties sold in the UK was 12,000 up on January 2011 and also at its highest level for four years.

HM Revenue and Customs (HMRC) figures showed that a total of 64,000 property transactions went through during January, up on the 52,000 deals in January 2011 and the best start to a year since 2008’s tally of 79,000.

David Dooks, BBA statistics director, said: “January saw the high street banks approve more mortgages for house purchase than of late, despite low household confidence, as some people try to complete transactions before the stamp duty holiday ends in March.”

All in all, this is great news for the UK property market and a warning sign to property investors that they are no longer the only people buying property.

According to UK property transaction figures, the number of private residential property sales fell by 11,000 during 2011, continuing the property slump that has now lasted for 3 years,.

Statistics released by HM Revenue and Customs show UK residential property sales dropped to one of the lowest totals recorded, with just 869,000 residential properties sold last year compared to the 880,000 homes sold in 2010.

The slowdown in the housing market in recent years was most evident in 2009, when only 848,000 houses were sold, (about half the number of transactions recorded in a year before the financial crisis began).

The Bank of England (BoE)  said recently that it believes even more lenders will tighten their credit criteria in 2012 and it will be even harder for would be purchasers and property investors to get a mortgage, heightening concerns UK residential property sales could hit another record low this year.

The first-time buyer sector of the industry made an ever so slight slight recovery in recent months after dropping to a three-year low last autumn.

However, the recovery may prove temporary with the stamp duty holiday for first-time buyers closing in spring 2012.

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Despite the apparent slump in the UK property market, Nationwide Building Society’s gross mortgage lending figures have increased by 48% to £8.9 Billion (GBP) in the six months to September.

Despite the dwindling number of First-Time Buyers (FTB) in the UK property marketplace, Nationwide lent them more than £1.2 Billion (GBP) in the first half of this year, 3% more than last year.

Over the same period, Nationwide’s subsidiary The Mortgage Works (TMW) doubled its gross mortgage lending to £2.6 Billion (GBP).

Nationwide’s Chief Executive Graham Beale, said: “It is particularly pleasing to see a 48% increase in our gross mortgage lending, which demonstrates our commitment to supporting growth in the economy as well as meeting the needs of our borrowers”.

Nationwide also reported a 17% rise in underlying pre-tax profits to £172 Million (GBP) in the six months to the end of September 2011, compared with the same period in 2010.

Even though historically low Bank of England (BoE) interest rates are making life difficult for savers, the building society saw a 250% increase in the rate of cash deposited in its savings accounts to £1.4 Billion (GBP), making it the second largest savings provider in the UK.

Despite the positive results, Nationwide expects conditions to remain difficult until the current Eurozone crisis is resolved and the UK economy stabilises.

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