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Mortgage lending in UK now at a five-year high

Figures from the Council of Mortgage Lenders (CML) show that mortgage loans were up 17% on the previous three months.

The CML has said there has been the strongest house buying activity for the past five years with £50 billion advanced to first time buyers, buy-to-let investors and home movers in the third quarter of 2013.

For September mortgage lending was £16 billion which is 41% higher than a year ago with homeowners taking out an extra 61,000 home loans in August, up 15% over a year.

House prices now rising

According to the Office of National Statistics (ONS) the house price index has reached record levels at 185.8 higher than the peak in January 2008.

The average price of house or flat is now £247,000 with house prices rising 3.8% in the year to August 2013. Excluding London, property prices are higher by only 2.1%.

One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements such as a new kitchen or bathroom.

In London house prices have risen strongly with modest increases in other parts of the country although research by the Liberal Democrat peer Lord Oakeshott shows house prices in 50 local authorities are less affordable than in 2007.

Higher property values for older homeowners allows the equity release buyer to access cash using a lifetime mortgage and maintain their lifestyle, pay for care at home or even help your children start or expand a business.

Other surveys from the Halifax and Nationwide show house prices are well below record levels with the average house price of £170,733, £30,000 less than record levels in 2007.

The difference in figures is due to the ONS Index uses actual transaction prices with a greater weighting from London properties whereas the Halifax and Nationwide use mortgage approvals.

Risk of a property price bubble?

The rise in prices could be due in part to the various schemes for lending.

The Bank of England’s Funding for Lending Scheme has failed to lend to small and medium businesses but has been very successful providing mortgage loans.

The introduction of the Help to Buy Scheme that allows people with only a 5% deposit to buy a house or flat with a further 15% supplied by the government could help to create a boom in house prices.

The Help to Buy scheme is not available to switching remortgage buyers or buy-to-let investors as it promotes new home ownership.

There is the possibility that these schemes will allow homebuyers to become overexposed to mortgage debt if they are able to borrow larger amounts.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as home and garden improvements or even gift to a family member or friend.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.19% Fixed Rate
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£999 App Fee
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Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
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Call for your free quote 0800 955 0058


    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.


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