Data from the Council of Mortgage Lending shows mortgage lending has reached a six-year high although lending has now slowed.

House market activity has cooled according to the Council of Mortgage Lending (CML) but lending for 2014 reached £205.6 billion the highest level since 2008.

The figures were 17% higher than 2013 which had mortgage lending of £176 billion. The CML has said that first time buyers were a key driver to the increase in 2014 assisted by the government’s Help to Buy scheme.

First time buyers last year numbered 300,000 and the highest figure since 2007, however, the CML said this is significantly lower than the half million considered normal.

Mortgage lending slowing

Mortgage lending for December was £16.5 billion and unchanged from November but 1% lower than this time last year.

For the fourth quarter 2014 mortgage lending totalled £51.6 billion, down 8% on the previous quarter of £56,049 but 1% higher than a year ago.

The Council of Mortgage Lending also said detailed figures released for November showed the number of loans advanced to first time buyers of 25,900 was 11.3% lower compared to October and 3.4% lower than November 2013.

The loan affordability of first time buyers was slightly higher at 3.39 times income up from 3.37 time in October. The amount borrowed using a mortgage is £124,822 and the typical gross income of a first time buyer is £38,476.

For older homeowners there is more activity with equity release mortgage buyers accessing cash in their property to improve their quality of life, home improvements or pay for care at home.

Fewer mortgages for homeowners

The number of remortgage buyers also reduced month on month with a total number of remortgage loans at 24,000, 8% lower than October.

Remortgage loans were valued at £3.6 billion down 10% on the previous month and 14% lower than this time last year.

For home movers the affordability was 3.01 times their income borrowing £152,995 and the typical gross income for a home mover is £53,368. The cost of borrowing represents 18.5% of income, much lower than the 23.8% peak reached in December 2007.

The situation was similar for buy-to-let investors with 17,500 mortgage loans with a value of £2.4 billion, a decrease of about 10% in October. Of the total number of buy to let loans 8,900 were advanced for new house purchases and 8,600 for remortgages.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even buy a more expensive home.

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

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