CML : House purchase lending up 5% in November in the UK
According to the Council of Mortgage Lenders, home-owners borrowed £11bn for house purchase, up 5% month-on-month and 2% year-on-year in the UK.They took out 60,800 loans, up 5% on October and up 0.2% on November 2015.
First-time buyers borrowed £4.7bn, up 4% on October and 9% on November last year. This equated to 30,100 loans, up 5% month-on-month and 8% year-on-year.
Home movers borrowed £6.3bn, up 7% on a month ago but down 5% compared to a year ago. This represented 30,700 loans, up 6% month-on-month but down 6% on November 2015.
Remortgage activity totalled £5.8bn, down 5% on October but up 14% compared to a year ago. This came to 34,700 loans, unchanged month-on-month but up 13% compared to a year ago.
Landlords borrowed £3.2bn, up 10% month-on-month but down 9% year-on-year. This came to 21,000 loans in total, up 13% compared to October but down 10% compared to November 2015.
The proportion of household income used to service capital and interest rates reached another historic low this month for both first-time buyers and home movers at 17.5%.
Affordability metrics for first-time buyers saw the typical loan size increase from £133,400 in October to £134,200 in November. The average household income remained unchanged month-on-month at £40,000. This meant the income multiple went from 3.56 to 3.54.
The average amount borrowed by home movers in the UK decreased to £171,000 in November from £172,000 in October, while the average home mover household income decreased slightly to £54,800 from £54,900. The income multiple for the average home mover went from 3.26 to 3.27.
Paul Smee, director general of the CML, commented:
“November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change and aspirations for home-ownership remain strong in the UK. Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but we still predict 1.2m transactions and a slight increase in gross lending to £248bn. ”
“Buy-to-let lending, driven by remortgage activity, saw its strongest monthly lending level since the stamp duty changes on second properties introduced last April. Despite this, we expect buy-to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak as further tax changes take effect.”