Gross mortgage lending reached an eight-month high of almost £18 billion in June, according to the Council of Mortgage Lenders.
After a four month hiatus, the Bank of England revealed that number of mortgage approvals picked up in June, rising 8% since May to a total of 67,200 loans.
The CML has even revised its prediction for gross lending in 2014 to more than £200 billion.
House Price Index News
The good news around lending has been reflected in property values. House prices rose 11 per cent in the year to May 2014 according to the ONS. The month saw a record annual rise of 20 per cent in London – although, as with any property market, there are hot spots. Property values in outer London increased by 4 per cent in the three months to June compared to a rise of just 2 per cent in prime central London according to the Marsh and Parsons London Property Monitor.
Buy-To-Let
Naturally, landlords benefited from rising prices and have seen their total returns on property investments reach their highest level in four years. According to the latest Buy-to-Let Index from LSL Property Services, total annual returns on the average rental property reached 12 per cent in the 12 months to June, up from 6 per cent a year ago. With the average gross rental yield dropping slightly to 5 per cent – it is climbing prices, not rents, that are bolstering BTL returns.
Arrears
The number of landlords trying to evict tenants through the courts has risen over the last year. Figures from the latest Templeton Tenant Arrears Tracker found that the number of court orders for possession is almost 6 per cent higher than during the final quarter of 2013, and 10 per cent up on this time last year.
Economic Outlook
The other big news this month has from the governor of the Bank of England who said the bank would be risking a dangerous housing bubble and a return to recession if it left interest rates at an all-time low for too long. Mark Carney said rising housing prices could result in households taking on more mortgage debt to afford a new home, limiting their ability to spend money on other things and dragging the economy back into contraction. On the plus side, Carney repeated the MPC's message that once rates did start to rise, increases would be "gradual and limited" because risks to the economy would take "some time to die down".
Too right…
