Mortgage lending rose year-on-year in September, new data shows, driven by a jump in first time buyers taking out new loans.
The month saw 28,600 first-time buyers take out mortgages, according to the Council of Mortgage Lenders (CML), which was up four per cent on the previous month and by 8.7 per cent year-on-year.
By value, they borrowed £4.2bn, which was 2.4 per cent higher than last month and 10.3 per cent ahead of September last year.
In contrast, lending to home movers slid by 4.2 per cent in September compared to August, but grew by 15.3 per cent year-on-year to £6.8bn.
Remortgaging levels bounced back in September after a dip in August, increasing by 20 per cent on the month to 31,000 and totalling £5.1bn.
Paul Smee, director general of the CML, said: “The market was a slow starter this year, but this quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.”
Buy-to-let saw year-on-year increases by volume and by value in both buy-to-let house purchase and buy-to-let remortgage, with a total 24,100 loans made worth a combined £3.7bn.
"Buy-to-let continues its growth this period, but at 18 per cent of new lending in September remains the fourth largest lending type behind first-time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession,” Smee said.
Responding to the figures, housing minister Brandon Lewis said: “We want to ensure that anyone who aspires to own their own home can turn their dream into a reality, so it’s great news that loans to first-time buyers are up 10 per cent on last year.
“Government initiatives have already helped more than 230,000 people to buy since 2010 and we’re further helping working people get on the property ladder, by delivering 200,000 new starter homes which will be available at a 20 per cent discount.”