The BBA figures show overall that total mortgage lending by its members was 38% higher in January that a year ago and the number of mortgages for home buyers which were approved, but not yet lent, was up 57% on a year earlier.
According to experts the buoyant lending market means that the property market is likely to keep on growing strongly and the BBA said the revival in activity has been helped particularly by the government's Help to Buy scheme.
‘Mortgage borrowing continues to rise compared to a year earlier as mortgage assistance schemes help first time buyers and housing chains more generally,’ said the BBA statistics director David Dooks.
‘Approvals for new purchases have climbed quite significantly and are now at their highest point since September 2007,’ he added.
David Brown, commercial director of LSL Property Services, said it means that for first time buyers looking to get on the ladder it is a great opportunity but for some that will be easier said than done.
‘Mortgages are certainly more available than a year ago, and for the most part even cheaper which is excellent news for the property market as a whole. But with a limited supply of homes available rising house prices could be a counterweight to this excitement for many would be new buyers,’ he explained.
‘Yet many potential first time buyers are already benefitting from more lending to landlords. While not a direct step onto the ladder, this is keeping rent rises under control and currently beneath inflation. A small minority of tenants are paying down any late rent, which is good for all parties,’ he pointed out.
‘Meanwhile, landlords are also benefitting from rising house prices, and that’s accelerating the growth of plenty of landlords’ portfolios. A healthy rental market is part of the recipe for a healthy property market as a whole and slower rent rises can help prospective first time buyers to build a deposit,’ he added.
Duncan Kreeger, director of West One Loans, the UK’s largest privately funded short term secured lender, said that more people climbing onto the property ladder is wonderful news but added that more housing for families to move into is needed.
‘While there is some exciting growth from the house building sector, volumes are still lagging behind. To really kick start growth, as well as new homes, we need to make better use of existing buildings,’ he suggested.
‘Across the UK, scores of commercial properties are lying empty but can’t be converted to residential use because the right finance just isn’t available. Too many dilapidated properties can’t be transformed into comfortable homes and modern offices because high street lenders don’t have the capacity to secure complex loans that don’t fit the mould,’ he explained.
‘To use space more intelligently, we need more intelligent, modern finance. But lending from the high street banks for property purposes has fallen for another month. Developers and investors need more flexible finance, which is why thousands of deals are leaving the bureaucracy of the mainstream lenders behind in favour of alternative finance,’ he added.
