Home buying levels soar as the market reaches 7 year high

The latest report from the Council of Mortgage Lenders (CML) shows house purchase lending figures for 2014 saw a boost of 11% compared to 2013. The total value of the transactions reached £112.7 billion – the highest annual level reached since 2007.

These are promising statistics for conveyancers, as 2015 seems to be a promising year if the property market continues at this rate.

Buy-to-let remains strongest within mortgage lending according to the CML data, with December’s transaction levels up 18% on the same month in 2013. The number of transactions for the year totalled 197,700 – a surge of 23% annually.

Richard Sexton, director of e.surv chartered surveyors, commented: “House price growth is beginning to moderate as we approach the General Election in May. We are in the midst of the cheapest period in recent history to get a mortgage, with rates at record lows, but it appears that some potential borrowers would still rather wait to see who will lead the new government before taking out a mortgage. However, this is no cause for alarm. This stability of prices is a further sign that the market has returned to sustainable growth, compared to the same period last year when arguably prices were pushing upwards unsustainably quickly.

“House purchase lending has picked up from the flat autumn, with lending increasing slightly in December and more significantly in January. Crucially, things have also improved for the market’s entry level, and 2014 saw the greatest number of first-time buyers since 2007 – encouraged in part by Help to Buy. With areas like Yorkshire and the North West still heavily reliant on higher LTV lending, it is vital that this support is continued whatever the outcome in May.”

Andy Knee, chief executive of LMS, comments: “2014 saw the number of house purchase approved loans rise by 11%, compared to 2013 as the market returned to pre-recession levels of activity, despite the introduction of stricter lending criteria under MMR. First-time buyers also experienced an increase in lending, with the number of approved loans rising by 15% from 2013 despite rising house prices as schemes such as Help to Buy played their part.

“The belief that there will be no imminent interest rate rise has given lenders an additional confidence boost in 2015 and should encourage further appetite for mortgage lending to keep the momentum going throughout the year.

“However, it is not all good news for aspirational buyers who still face rising house prices – albeit at a slower pace than before. The latest ONS figures show a rise of 9.8% in the year to December, with London still acting as the driving force in the property market.

“Remortgaging activity remains lower than 2013 – down by 6%, despite the abundance of attractive rates on offer. This fall could be attributed to a combination of factors: the tougher criteria of MMR and the public perception of this along with expectations for a lingering low interest rate. For the many families still feeling the pinch now could offer the time to improve your rate and free up cash to ease these pressures.

“Overall, the latest figures present a mixed-picture for the market with good levels of activity but still a number of challenges to overcome to ensure that it keeps moving forward. It awaits to be seen what approaches and policies are considered in the lead up to the election, for which housing will be a key battleground. May is likely to highlight a time of uncertainty for the property market but it is not unrealistic to retain optimism for the year ahead.”

Today's Conveyancer