Date Published 09 November 2012
House purchase lending in October is predicted to have increased by 10% compared to September, as the Funding for Lending scheme increased mortgage availability.
The forecast has come from e.surv chartered surveyors, which uses its own valuations data to predict official statistics which take more time to filter through.
e.surv, part of LSL, estimates that there were 54,713 house purchase loans in October, the highest since January and the second highest since December 2009.
If correct, the figure represents a 4% increase on October last year, and reverses four consecutive months of negative annual growth dating back to May this year.
Richard Sexton, business development director of e.surv, said: `If we discount January this year, when lending levels were artificially high thanks to the rush to beat the end of the Stamp Duty holiday, house purchase lending is as strong as it’s been since the end of 2009.
`It suggests the mortgage market is beginning to find its feet again after a torrid six months caused by tight funding conditions for lenders.
`I would speculate that much of the improvement is down to the Funding for Lending scheme. It didn’t have a significant impact in Q3, but now it is beginning to flood lenders’ balance sheets with cheaper funds and has encouraged them to increase their mortgage lending.`
However, he cautioned: `The improvement in October is encouraging, but it is by no means a sign the market will recover to its pre-financial crisis health.
`Lenders aren’t confident enough to really begin focusing their efforts on first-time buyers, which is why lending to high LTV borrowers still forms a disproportionately large share of the mortgage market.`