Prospective sellers set to benefit from highest mortgage lending since 2008

Bank of England data shows that mortgage lending has reached its highest level since 2008 and this is set to have a positive impact on current homeowners looking to sell their properties.

By further boosting access to home ownership, the rise in mortgage lending has also encouraged homeowners that now is a great time to list their home on the market. The success of the Government's Help to Buy scheme has also widened the pool of potential buyers competing for each property.

Stephen Ludlow, Chairman at ludlowthompson, explains: “The rise in mortgage lending is great news for the market as a whole as it will trigger increased activity and result in more deals being completed.”

In addition, the 6% increase in house prices over the last year will also come as great news for homeowners.  

An in-depth look at these figures reveals that house prices for existing homeowners moving into a new property rose at a quicker rate than first time buyers. Homeowners moving into a new property saw prices rise by 5.8% whereas prices on properties for first-time buyers increased by 3.8%.

The news that the cost of their next move into a larger property may be rising at a faster rate than the rate of their current home may cause concern amongst current homeowners.

Stephen Ludlow says: “This might imply a homeowner remaining in their home over a long period of time will see slower capital growth than a homeowner who has moved up the property ladder over the same period.”

 “It is important that homeowners receive regular valuations of their property. Knowing its market value puts them in the strongest possible position as they can foresee any gap widening and can act accordingly.”

Rising property prices creates an incentive for current homeowners to climb up the property ladder as bigger properties continue to outperform smaller properties in terms of the growth in prices.

Stephen Ludlow adds: "As homeowners get older, they will typically receive higher earnings. This enables them to move up the property ladder by purchasing larger properties and benefitting from faster capital growth.”