The housing market showed further signs of stabilising during June with a 23 per cent jump in the number of mortgages taken out by people buying a home, figures revealed today.
Around 45,000 mortgage were advanced for house purchase during the month, the fifth consecutive monthly increase and the highest level for a year, the Council of Mortgage Lenders said.
There was also a steep rise in the number of first-time buyers getting on to the property ladder, with 17,200 mortgages taken out by people buying their first home, 26 per cent more than during May.
Despite the improved figures, the CML warned that housing transactions were still weak by historic standards.
The group said the number of mortgages advanced for house purchase was less than half the average number seen in June during the past seven years, while loans to first-time buyers remain well down on the 30,000-plus taken out each month by this group before the housing market correction began.
CML economist Paul Samter said: "Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity."
A total of 116,700 mortgages for house purchase were advanced during the second quarter of the year, 50 per cent more than during the previous three months, but still 22 per cent fewer than in the same period of 2008.
The group said there were also "tentative signs" that the tightening in lending criteria imposed by banks and building societies since the begin of the credit crunch had ended.
The average deposit put down by a first-time buyer has remained unchanged at 25 per cent since February.
The average income multiples advanced have also started to increase modestly, with the typical first-time buyer borrowing 3.08 times their pay, up from 3.04 times in May, while former owner-occupiers were lent an average of 2.76 times their income in June, up from 2.74 times during the previous month.
The CML also reported a slight increase in the number of people remortgaging to a better deal, with these loans rising by 13 per cent during June to 34,000.
But volumes remained nearly two-thirds lower than in June last year, as record low interest rates mean many people are better off staying on their lender's standard variable rate when their existing deal ends.
Around 78 per cent of mortgages taken out during June were fixed-rate ones, the highest proportion since June 2007, although the popularity of the deals is in part likely to reflect their greater availability.Reuse content