Figures from UK Finance show that mortgage lending rose to its highest level since the Brexit vote last month, a total of 49,683 mortgages were agreed in May, up 9.1% on a year earlier, and the highest level since June 2016. Overall, £14bn was lent by High Street banks, up 3.5% from May 2018.
Overall, the North of England saw greater growth in first-time buyers than anywhere else in England outside the Midlands. This reflects better affordability in regions of the North, with average deposits and income multiples lower than elsewhere in England, particularly London and other English cities. Mortgage lenders helped 84,900 first-time buyers in the North of England onto the housing ladder in 2018, up three per cent compared to the previous year and the highest level since 2006.
The figures also show there were 80,400 homemovers in the North of England in 2018, an increase of 1.1 per cent on the previous year and the highest level since 2007. This contrasts with an overall decline in homemovers across the UK in 2018.
Meanwhile, the Northern Powerhouse cities of Newcastle, Liverpool and Hull all saw strong growth in buy-to-let lending, bucking the national trend. This has been driven by lower house prices coupled with a healthy labour market and strong rental demand, meaning that landlords can achieve higher yields than the UK average. Hull saw particularly strong growth of 12.8 per cent in buy-to-let lending, along with a steady increase in first-time buyers and homemovers.
Commenting on the figures, Jackie Bennett, Director of Mortgages at UK Finance, said “These figures show the North of England has a strong and dynamic mortgage market, with lenders helping thousands of first-time buyers onto the housing ladder. This has been combined with a steady increase in homemovers, making it easier for buyers to find a property that suits their needs. Meanwhile, attractive rental yields in many Northern cities have driven growth in buy-to-let lending, bucking the national trend.”
“The mortgage industry stands ready to work with the UK government and local authorities to capitalise on these strengths and help deliver on the full economic potential of the Northern Powerhouse.”