More home loans were secured to buy property in the UK during the first two months of 2017 than any year since 2007, fuelled primarily by an increase in first-time buyer activity.
In all, 93,200 loans were taken out in January and February, the highest number since the financial crisis, fresh data released by the Council of Mortgage Lenders (CML) shows.
According to the figures, first-time buyers borrowed £3.8bn in February – up 6% on January and 12% on February 2016, suggesting that government measures designed to curb the buy-to-let market are working.
Borrowing by buy-to-let investors for the month remained unchanged in February at around £800m.
Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “After a fairly flat start to the year, the market is starting to look livelier. A surge in first-time buyer activity will be fuelled by many who will be looking to take advantage of the momentary slowdown in house price growth.”
Home movers and first-time buyers took out a combined total of 48,600 loans, with buyers collectively borrowing £5.1bn, up 6% on the previous month but down 4% for the year.
However, there was a fall in remortgaging levels in February, with activity dropping 26% to £5.2bn. But despite the dip, remortgaging activity is still 9% higher in volume than February 2016, reflecting the fact that many existing borrowers are taking advantage of low interest rates to secure a better deal on their repayments.
Malhi added: “Until the Bank of England does finally announce a rate rise, I expect to see remortgaging levels continue to rise year-on-year.
“Not only are there are around three million borrowers in the UK paying their lender’s higher Standard Variable Rate who could save an average of £3,500 a year by remortgaging, but thanks to technology, the switching process has become far simpler and more convenient for these people to do so.”