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Lending On The Rise

Lending on the riseOn a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in June rose with first-time buyers borrowing £5.9bn, up 26% on the previous month and 9% on June 2016. This was roughly 36,000 loans, up 22% month-on-month and 6% year-on-year.

Home movers borrowed £7.8bn, up 26% on May and 15% year-on-year. This equated to 36,500 loans, up 24% month-on-month and 9% compared to a year ago, and remortgage activity totalled £6bn, up 5% by value on May and 7% on a year ago. The number of remortgage loans totalled 34,300, up 5% month-on-month and 6% on a year ago.

 

Gross buy-to-let lending was also up totalling £3.0bn, up 3% on May and up 3% compared to June 2016. These equated to 19,700 loans, up 3% month-on-month and 6% year-on-year.

The proportion of household income used to service capital and interest rates continued to be near historic lows in June for both first-time buyers and home movers at 17.3% and 17.5% respectively with affordability metrics for first-time buyers indicating the typical loan size has increased from £137,000 in May to £139,000 in June. The average household income increased to £41,000 from £40,500 meaning the income multiple went up from 3.58 to 3.59.

The average amount borrowed by home movers in the UK increased to £180,000 from £177,000 the previous month, while the average home mover household income increased month-on-month from £54,900 to £55,200. The income multiple for the average home mover went up to 3.39 from 3.37.

The content of these news articles is for information purposes only and does not constitute as financial advice

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