Homebuyers have enjoyed a welcome boost after it was revealed mortgage lending reached its highest level in almost a year in July.
Figures from the Council of Mortgage Lenders (CML) show that around 48,800 mortgages were approved for people purchasing a house during July, the highest number seen since last August.
Disappointingly, however, there were fewer loans to first-time buyers, with around 18,200 being agreed, down from 18,500 in June and 19,500 in July 2010.
It was also revealed that those trying to take their first step onto the property ladder still need an average deposit of 20%, as has been the case through most of 2011.
The CML added that typically first-time buyers borrowed 3.18 times their income in July, down from 3.22 in June.
Meanwhile, the data also showed the popularity of fixed-rate mortgages has started to fade, after having hit an 18-month high in April.
Around 60% of borrowers took out a fixed-rate mortgage in July, compared with 62% in June.
With the Bank of England having now kept the base rate of interest at its historic low of 0.5% for 30 months in a row, and many experts predicting there will be no rise in the foreseeable future, the CML said it appears borrowers are once again turning their backs on fixed rates.
It added, however, that with the path of interest rates into next year being 'far from certain', many borrowers may continue to opt for fixed rates to avoid the uncertainty.
Commenting on the data overall, CML director general Paul Smee said the UK mortgage market is currently holding steady, but warned financial turmoil both at home and abroad, and recent Bank of England approvals figure, do not necessarily suggest lending will continue to rise in the coming months.
"However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages," he added.
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