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UK house purchase lending numbers up 16% month-on-month in March PDF Print E-mail
Tuesday, 19 May 2015

The Council of Mortgage Lenders (CML) today releases new data on the characteristics of UK lending in March and the first quarter of 2015 broken down by trends to first-time buyers, home movers, remortgaging and buy-to-let.

Lending in March:

    •    Total number of loans advanced to first-time buyers in March was 23,000 - up 20% on February but 5% down compared to March 2014. First-time buyers borrowed £3.4 billion, which was up 21% on February and 3% up on March last year.
    •    Home movers took out 25,200 loans, an increase of 14% compared to February but down 3% year-on-year. These loans were worth £4.9bn - up 17% on February and 7% compared to March 2014.
    •    Remortgage lending increased month-on-month with 26,600 loans advanced - up 19% on February and 6% up on March 2014. The value of these loans (£4.2 billion) also increased month-on-month by 24% and was up 14% year-on-year compared to March 2014.
    •    There were 18,200 buy-to-let loans in March - up 12% on the previous month and up 21% compared to March 2014. These loans were worth £2.7bn, up 13% compared to February and up 35% on March 2014.

Lending in the first quarter 2015:

    •    First-time buyers took out 61,300 loans in the first quarter 2015 - down 24% on the fourth quarter of 2014 and 11% down on the first quarter of 2014. First-time buyers borrowed £9 billion, which was down 23% on the fourth quarter of 2014 and a year-on-year decrease of 5% compared to the first quarter 2014.
    •    Home movers took out 70,400 loans, a decrease of 25% compared to the fourth quarter 2014 and a decrease of 11% year-on-year. These loans totalled in value £13.5bn - down 22% on the previous quarter and 5% down year-on-year on the first quarter 2014.
    •    Remortgage lending increased quarter-on-quarter with 75,400 loans advanced - up 3% on the fourth quarter 2014 but down 5% on the same quarter last year. The value of these loans (£11.8 billion) also increased quarter-on-quarter by 6% and was up 2% year-on-year compared to quarter one 2014.
    •    There were 52,300 buy-to-let loans advanced in the first quarter of 2015 - down 3% on the previous quarter but up 15% on the same period in 2014. These loans were worth £7.8bn in value, up 1% compared to the first quarter and up 28% on the first quarter of 2014.

Paul Smee, director general of the CML, commented:

"It was a slow start to activity in the first couple of months of 2015 but the market started to get out of the dip in March, a trend that we think will continue as the year goes on.

"We will have to wait and see how the housing market reacts to the general election result and the reduction in the risk of a prolonged period of market uncertainty which could well have been damaging to businesses and the housing market.”


As previously reported, gross mortgage lending reached £16.1 billion in March. This represents an 18% increase from February's gross lending total and 5% higher than lending in March 2014. This means gross lending for the first quarter of this year was £44.5 billion - down 13% on the previous quarter and a 4% decrease on the first quarter of 2014.

Lending for home-owner house purchase

Home-owner house purchase lending increased month-on-month by volume in March to 48,200 - up 16% on February but down 4% compared to March 2014. These loans totalled £8.2bn, which was up 17% on February and 4% on March last year.

This meant that loans advanced for home-owner house purchase in the first quarter of 2015 was 131,800, a decrease of 24% on the fourth quarter of 2014 and a year-on-year decline of 11% compared to the first quarter 2014. These loans were £22.4 billion in value - down 23% on the previous quarter and 5% down on the same quarter in 2014. 

Analysis of first-time buyers lending trends

First-time buyers typically borrowed 3.36 times their gross income in March, unchanged from February. The typical loan size for first-time buyers increased month-on-month to £123,290 in March, up from £122,285 in February. The typical gross income of a first-time buyer household changed slightly to £38,500 in March from £38,085 in February.

First-time buyers in February paid 18.8% of gross income towards covering capital and interest payments, down from 19.1% in February but still significantly less than the recent peak of 24.8% in December 2007.

In the first quarter 2015, first-time buyers typically borrowed 3.37 times their gross income, down slightly from 3.38 in the fourth quarter 2014. The typical loan size for first-time buyers also decreased quarter-on-quarter to £122,794 from £124,450 in the fourth quarter 2014. The typical gross income of a first-time buyer household changed slightly to £38,139 from £38,324 the previous quarter.

First-time buyers in the first quarter paid 19% of gross income towards covering capital and interest payments, down from 19.2% the previous quarter.

Analysis of home mover lending trends

Home movers affordability changed slightly month-on-month, with borrowers typically being advanced a mortgage loan 3.07 times their gross income in March, only a slight change compared to 3.06 in February. The typical loan size for home movers was £160,615 in March, up from £157,730 the previous month. The typical gross household income of a home mover was £54,135 in March, which was up from £53,514 in February.

Home movers' payment burden remained relatively low in March at 18.3% of gross income being spent to cover monthly capital and interest payments, down from 18.5% in February, and well below the recent peak of 23.8% in December 2007.

In the first quarter 2015, home movers typically borrowed 3.06 times their gross income, up slightly from 3.03 in the fourth quarter 2014. The typical loan size for a home mover also increased quarter-on-quarter to £158,440 from £153,500 in the fourth quarter 2014. The typical gross income of a first-time buyer household changed slightly to £53,554 from £53,173 the previous quarter.

Home movers in the first quarter paid 18.5% of gross income towards covering capital and interest payments, changed slightly from 18.4% the previous quarter.

Analysis of remortgage lending

In March, remortgage lending increased month-on-month with 26,600 loans advanced - up 19% on February and 6% up on March 2014. The value of these loans (£4.2 billion) also increased month-on-month by 24% and was up 14% year-on-year compared to March 2014.

In the first quarter 2015, remortgage lending increased quarter-on-quarter with 75,400 loans advanced - up 3% on the fourth quarter but down 5% on the same quarter last year. The value of these loans (£11.8 billion) also increased quarter-on-quarter by 6% and was up 2% year-on-year compared to quarter one 2014.

Buy-to-let lending trends

In March, there were 18,200 buy-to-let loans - up 12% on the previous month and up 21% on the same period in 2014. These loans came to £2.7bn in value, up 13% compared to February and 35% on March 2014.

The number of buy-to-let loans for house purchase was 8,600 in March, up 8% on February and 13% on March 2014. These loans represented a value of £1.2 billion, an increase of 20% month-on-month and 33% year-on-year compared to March 2014.

The number of buy-to-let loans remortgages increased 15% in March from February to 9,400, which was an increase of 29% on March 2014. The value of these loans totalled £1.4bn, up 8% month-on-month and 27% compared with March 2014.  

In the first quarter of 2015, buy-to-let lending made up 18% of total gross lending in the UK, which was the highest proportion of total lending since quarterly records began in mid-2006. This was mainly driven by both a fall in remortgage and house purchase loans to home-owners activity in this period. There were 52,300 buy-to-let loans advanced in the first quarter - down 3% on the previous quarter but up 15% on the same period in 2014. These loans came to £7.8bn in value, up 1% compared to the first quarter and up 28% on the first quarter of 2014.

Within this, the number of buy-to-let loans for house purchase was 24,440 and the number of loans for buy-to-let remortgage was 27,370, which were down 8% and up 2% respectively compared to the fourth quarter 2014. In comparison to the first quarter of 2014, these loans were up 6% for buy-to-let house purchase and 23% up for buy-to-let remortgage.

Loans for buy-to-let house purchase represented a value of £3.3 billion, down 8% on the previous quarter but up 6% compared to the first quarter 2014. Buy-to-let remortgage loans represented £4.2 billion, unchanged compared to the previous quarter but up year-on-year by 29% compared to the first quarter 2014.

(Source - CML Press Release)
 

 
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