Mortgage lending in the United Kingdom increased from the previous month in February, helped by strong growth in first-time property buyers, data from a survey by the Council of Mortgage Lenders (CML) showed Monday.
The number of mortgages issued for the purchase of residential properties increased 4 percent month-on-month to 36,600 in February. Compared to February 2011, the number of mortgages climbed 17 percent during the month.
The total value of house purchase loans moved up 2 percent sequentially to GBP5.4 billion in February. Year-on-year, house purchase loans jumped 20 percent.
Meanwhile, the number of remortgage loans decreased 3 percent month-on-month in February, while the value of remortgage loans decreased 6 percent.
The number of house loans issued to first-time buyers increase 8 percent on a monthly basis, and climbed 18 percent year-on-year. Loans to home movers rose 2 percent month-on-month, and 16 percent annually, data showed.
Despite the rise in mortgage advances reported by the CML in February, we continue to expect house prices to trend modestly lower over the coming months, Howard Archer, an economist at IHS Global Insight, said in a note Monday.
"Specifically, we expect house prices to fall by around 3% by the end of 2012. Housing market activity is still low compared to long-term norms. And although latest indicators suggest overall that the economy returned to limited growth in the first quarter, the economic fundamentals still look far from rosy for the housing market with unemployment high and likely to rise further, earnings growth muted, debt levels high and the growth outlook still very uncertain," Archer added.
by RTT Staff Writer
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