Mortgage lending jumped in the month of June according to figures released by the Council of Mortgage Lenders (CML).
The total number of loans made to buy new homes rose in June to 46,700, an increase of 22% compared to the month of May.
Loans specifically for first time buyers rose 24% to 18,100; this represents a 10 month high.
Experts though have warned against reading too much in to the rise as it is coming on the back of previous months where the number of mortgage applications were low, indeed the figures are down on the same time last year.
Paul Smee, director-general of the CML, said:”Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while.”
The increased levels of lending can be attributed to lower mortgage rates generally and an increase in the number of deals available for people with smaller deposits. The market is seeing lenders offer more competitive mortgage products for people with only a 10% deposit.
First Time Buyers
The number of first time buyers having mortgages approved is still down significantly on previous years. Experts believe that one of the reasons is the higher level of deposit now required by first time buyers to secure a mortgage.
First time buyers still need an average deposit of 20% to get on the housing ladder, despite being down from a high of 25% in January of this year it represents a significant increase on the long term average deposit required of around 10%.