Home owner and buy-to-let activity have both continued the upward trend seen last month, new figures have revealed.
According to the Council of Mortgage Lenders, the total number of home loans made was 65,000, up 3% on the previous year.
First-time buyers borrowed £4.6 billion for home-owner house purchase, up 10% on September and October last year.
The total number of loans for first-time buyers in October was 29,900, an increase of 8% from the previous month and 3% for the year, the highest since 2009.
Home-owner remortgage activity increased 6% by volume and 10% by value on September. Remortgage lending was up 19% by volume and 34% by value from a year ago.
There has been an increase in recent remortgaging activity as homewners look to lock into competitive rates before an expected base rate rise from the Bank of England next year.
Gross buy-to-let saw month-on-month saw increases of 4% by volume and 3% by value, but more substantial growth year-on-year.
In the recent Autumn Statement, Chancellor George Osborne announced that there would be a stamp duty charge of 3% as part of the government’s aim to curb the buy-to-let sector and help first-time buyers get on the housing ladder
Market commentators have suggested that there is likely to be a surge in demand for buy-to-let property as people look to get in before the April deadline.
Paul Smee, director general of the CML, said: “Home owner and buy-to-let activity have both continued the upward trend seen last month, and the market looks set to finish the year strong, despite taking time to gain momentum after a slow start to 2015.
“With increasing employment and the current absence of inflationary pressures in the UK, conditions for continuing demand in the housing market seem likely going into the New Year. How supply will respond to this challenge going forward is a crucial question for 2016.”
Commenting on the figures, Stuart Law, CEO at Assetz for Investors, said: “We are already seeing buy-to-let purchases increase substantially before the new stamp duty policy bites in April. After that we expect buyers in the Northern Powerhouse to increase further due to cash purchases to avoid the mortgage interest tax being more affordable and also yields being a lot higher.
“The prolific lack of supply and variety of homes means competition between first-time buyers and buy-to-let investors is fierce. Many potential homeowners are being forced to turn their attention to rental accommodation, but the fault doesn’t lie with landlords but past government policies which favoured the stimulation of demand without building enough homes to meet it. Hopefully that is on the cusp of changing for the better.
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