Rise in buy-to-let and first-time buyer lending

Buy-to-let market predicted to continue to grow at "an impressive rate"

One bedroom flat for sale in Hawley Square, Margate. £75,000. Ward & Partners.

Gross UK mortgage lending rose 12 per cent in July to £16.7 billion, up from £14.9 billion in June and 29 per cent on July2012, according tothe Council of Mortgage Lenders.

This growth was particularly fuelled by first-time buyers. In July, 25,300 loans were made to first-time buyers, worth a total of £3.5bn, was 6 six per cent on June and 46 per cent on July last year.

The typical first-time buyer loan size was almost unchanged from June at £117,038.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:"While property prices continue to rise in parts of the country, fuelling fears of a house-price bubble, this is not yet affecting affordability, which improved marginally. This is encouraging, with the average loan size remaining unchanged and income multiples dropping slightly to 3.31, many of those getting on the property ladder for the first time are not over stretching themselves."

Lending for buy-to-let also rose -15,200 buy-to-let loans were made in July, a rise of 12 per cent compared to June.

George Spencer, chief executive officer of online lettings company Rentify, said:"Both experienced and novice investors alike are taking the plunge and expanding portfolios or getting into buy-to-let for the first time, while there is strong growth in buy-to-let remortgaging as existing landlords take advantage of ultra low rates. This also demonstrates that many are investing for the long term.

"Because the recovery is coming from such a low base, we expect the buy-to-let market to continue to grow at an impressive rate in coming months."