New data released from the Council of Mortgage Lenders (CML) shows a
breakdown of mortgage lending in the UK in April, including first-time
buyers, home movers, remortgage and buy-to-let.
Lending in April:
• Lending in April was weaker compared to a year ago.
• First-time buyers saw a decline in lending compared to March and April last year.
• Home mover lending volumes went up slightly month-on-month but there was a year-on-year decline compared to April last year.
• Home-owner remortgage activity declined compared to last year.
• Buy-to-let continues to grow year-on-year, mainly driven by remortgage activity, although there was month-on-month decline compared to March.
Paul Smee, director general of the CML, commented:
"House purchase lending in April was relatively subdued compared to last year, but similar to activity in March. The economy is recovering, with employment up, earnings growing, and competitive mortgage rates, so we expect activity to continue building as the year progresses.
“Buy-to-let is showing stronger growth than home-owner lending, buoyed significantly by remortgaging, which continues to remain more subdued in the home-owner market.”
As previously reported, gross lending in April was £15.8bn, down from £16.1bn in March and £16.8bn in April last year.
Lending for house purchase and remortgage
The number of loans for house purchase remained steady in April compared to March, but was down compared to a year ago.
On an annual basis, there was a fall across both first-time buyer numbers and home movers. On a monthly basis, the number of first-time buyers fell but the number of home-movers rose slightly.
Growth rate shows activity across the three categories - first-time buyers, home movers and remortgage - is down compared to April last year. The 12 month rolling sum of the number of first-time buyers has been above 300,000 since June 2014, though it has been gradually falling since October.
First-time buyer loan sizes have increased since a year ago, though their income has grown faster in proportion relative to loan sizes which has meant a fall in the typical loan-to-income ratio. Loan-to-value ratios have also fallen compared to a year ago.
Competitive mortgage rates mean first-time buyers are paying less to service their mortgage than any time since we began tracking this in 2005.
The average home mover loan size decreased in April compared to March, but increased compared to the same period last year. Average income increased in April, meaning loan-to-income decreased both month-on-month and year-on-year.
Remortgage activity among home-owners was down on the month and on the year. It has remained relatively subdued since around 2009.
Lending for buy-to-let
Lending for buy-to-let in April saw a decline compared to March, but there was substantial growth compared to levels in April last year. This was largely due to the increased levels of remortgage activity in the buy-to-let sector seen since the beginning of the year.
The composition of lending for buy-to-let is different compared to that of home-owner lending. While over the past year about 30% of lending to home-owners was for remortgage, in the buy-to-let market 52% of lending was for remortgage.
(Source - CML Press Release)