July property prices show first real rise since 2007

July property prices show first real rise since 2007Monday 14th September 2009

Remortgaging figures are still weak, but lending for house purchase showed its first material annual growth in July for the first time since early 2007, according to figures from the Council of Mortgage Lenders. (CML)

Home buyers borrowed GBP 14.5 billion, which is a significant rise on the second month running, but still 42 per cent lower than the figures for July last year.

Within this, house purchase lending accounted for 56,000 loans totalling £7.5 billion - up from 47,000 loans totalling £7.1 billion in July last year.

This lending splits down into 20,400 first-time buyer loans and 35,700 home mover loans in July, up 18 per cent and 28 per cent respectively on June. But compared with a year earlier, the rise in first-time buyer numbers was higher, up 22 per cent compared with a 17 per cent rise in the number of movers.

In terms of product choice, over three quarters of mortgages taken out in July were at fixed rates, with borrowers able to lock in to an average fixed rate of 4.7 per cent, well below the average of 5.57 per cent over the past decade.

Commenting on the latest survey data, CML economist Paul Samter said: “It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidencethat lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being. The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet."

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