House sales up again with flood of new buyers

 
Tim Wallace
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The price of an average house in London has risen 20.6 per cent in the past 12 months
The housing market resurged again in July, defying expectations that activity was slowing down, industry figures revealed yesterday.

The number of first-time buyers surged by 25 per cent in the year, according to the Council of Mortgage Lenders (CML).

More than 30,000 bought a place on the housing ladder in the month, the biggest number since late-2007.

And the 25 per cent jump repres­ents an acceleration from the 19 per cent increase in the 12 months to June.

Between them, the first-time buyers borrowed £4.6bn in the month – up by an even faster 39 per cent, in part illustrating the scale of the rise in house prices over the past 12 months.

The number of loans to home movers increased by 19 per cent year on year in July, to 37,500. By value, they borrowed £7.2bn, up 31 per cent on the year – with values again rising faster than the number of loans. Buy-to-let lending also rose, up 26 per cent by value to £2.4bn.

“First-time buyers are returning in their droves, propelling the mortgage market forwards. Access to finance has been transformed over the last 12 months,” said Richard Sexton from chartered surveyors e.surv.

“This is a sustained, healthy re­covery rather than a bubble. Lenders are signalling a desire to boost lending even further towards the end of this year. But at the same time, new regulation has ensured that borrowers are given more advice than ever before and are tested against future rate rises.”

By contrast, the number of those re­mortgaging slumped. By value the amount of remortgage lending drop­ped five per cent on the year to £3.9bn.

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