June mortgage figures suggest it's full steam ahead for the property market

The number of mortgages taken out to fund house purchases increased in June, according to figures from lenders which suggest that new rules on loans have not dampened the property market.

Data from the Council of Mortgage Lenders showed that 60,500 house purchase loans worth a total of £10bn were taken out during the month, a rise of 5% by number and 6% by value on May's figures. Compared to June 2013, the figures were up by 15% and 23% respectively.

More than half of those loans were taken out by home movers, who accounted for 31,900 of the mortgages advanced, 4% up on May, however the number of first-time buyers showed a bigger month-on-month increase, rising by 7% to 28,600.

The average first-time buyer borrowed 3.47 times their gross income to fund their purchase, compared to 3.46 in May, while the typical loan size increased by more than £2,000 to £123,865. The typical gross income of a first-time buyer household also rose, to £37,000 from £36,500 in May.

Paul Smee, director general of the CML, said: "For the second month running since new FCA rules took effect, lending characteristics remain similar to the market beforehand.

"We now feel confident that, as we would hope, the mortgage market review [MMR] effect is more gentle dampener than hard brake."

Investors' appetite for property continued to grow, with the CML reporting a 23% year-on-year increase in the number of buy-to-let loans. A total of 15,600 landlord mortgages were advanced, worth £2.2bn.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the figures suggested that the new rules brought in with the MMR had not been detrimental to buyers.

"Buy-to-let continues to grow as investors seek better returns than they can earn on cash and more certainty than the stock market. Lenders have been cutting buy-to-let rates and easing criteria in an effort to ensure lending volumes are not too dented post-MMR because buy-to-let doesn't come under its remit.

"Investors are benefitting from cheap mortgage rates, less strict criteria and plenty of demand from tenants looking for decent property to rent."

The CML figures are for mortgages advanced during the month so reflect sales some weeks or even months before.

Source: The Guardian