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Mortgage lending to buy property showed the first annual increase since early 2007 according to the latest data from the Council of Mortgage Lenders (CML).

Lending to purchase property (i.e. not including re-mortgaging) in July this year was 27 per cent higher than in June and six per cent higher than it was in July last year.  House purchase lending accounted for 56,000 loans totalling £7.5 billion - up from 47,000 loans totalling £7.1 billion in July last year.

The results also suggest that first time buyers are making a comeback.  Lending to first time buyers was 22 per cent higher than a year ago and up 18 per cent on June.  That's a faster rate of growth over the year than was seen for lending to home movers. 

Re-mortgaging remained weak, largely because relatively low standard variable rates give owners little incentive to move lenders. 

In terms of product choice, over three quarters of mortgages taken out in July were at fixed rates, with borrowers able to lock in to an average fixed rate of 4.7 per cent, well below the average of 5.57 per cent over the past decade.

Commenting on the latest survey data, CML economist Paul Samter observed: "It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to re-mortgage for the time being. The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet."