Best July for house purchase lending in 7 Years
Mortgage market recovering from introduction of MMR
- 66,279 house purchase approvals in July as market rebounds after MMR
- High LTV lending rises 52% year-on-year to 11,533 approvals
- Stock of first-time buyer properties decreasing – 13% fewer approvals on properties up to value of £125,000 than a year ago
Last month saw the strongest July for house purchase lending since the financial crisis, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.
There were 66,279 house purchase approvals in July, 7.5% higher than the 61,651 approvals in July 2013. It was the strongest July for house purchase lending since 2007, when there were 112,291.
On a monthly basis, house purchase approvals topped 66,000 for the second consecutive month, suggesting the mortgage market is adjusting to the introduction of Mortgage Market Review (MMR) regulations. Monthly mortgage approvals were 6.9% higher compared to 62,007 in May – the first full month in which lenders had to be fully compliant with the new MMR regulations (introduced on 26th April 2014).
Richard Sexton, director of e.surv chartered surveyors, explains: “After a period of adjustment, the mortgage market has navigated around the regulatory speed-bumps and the lending recovery is firmly back on course. Training staff, implementing the new rules and putting in place longer advisory processes caused a slight slowdown in lending in April and May. But lending levels have bounced back, and the bottleneck of approvals stuck in the system has cleared.
“Not only that, the prospect of an interest rate rise is creeping ever closer, and is encouraging more borrowers to lock into cheap fixed-rate deals while they can – which is also pumping up lending volume.”
Read the full Mortgage Monitor release here