127 views

Housing market activity picked up in August following July's dip

Helen Cahill
Follow Helen
BRITAIN-WEATHER-AUTUMN
Some optimism has returned to the UK house market in recent weeks (Source: Getty)

Lending for house purchases increased 11 per cent in August as confidence started to return to the UK housing market.

Homeowners borrowed £12.2bn in August, according to the Council of Mortgage Lenders (CML), up 14 per cent month-on-month and up 11 per cent year-on-year.

Read more: This is how sterling's unstoppable slide will affect UK house prices

There was a sizeable jump in the total borrowed by first-time buyers; this group borrowed a total £5.1bn, up 24 per cent annually.

There was a dip in lending in July, reflecting a cautiousness following the result of the EU referendum. Mortgage advances fell to 64,300 in July, and were at 72,500 in August.

Paul Smee, director general of the CML, said: "House purchase activity bounced back from a dip in July, reflecting resilience in first-time buyer activity.

"Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August's base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months."

Read more: House prices in Chelsea have fallen by 10 per cent this year

Howard Archer, chief UK economist at IHS Global Insight, said: "The August CML data do little to change our view that house prices will be essentially flat over the final months of 2016.

"Relatively limited housing market activity is likely to limit house prices but we suspect that the current resilience of the economy and a shortage of properties will prevent prices from falling over the final months of 2016."

House prices will fall in 2017, possibly by three per cent, he said.

Related articles