The number of loans for home owner house purchase in the first quarter of 2014 decreased by 16% in comparison to quarter four of 2013, but was up 27% compared to the first quarter of 2013.
First time buyers took out 24,400 loans in March, 24% more than in March last year. In quarter one of 2014, there were 34% more first time buyer loans compared to the first quarter of 2013.
Home mover loans was the same in March as in February but the number of loans was 11% higher than in March 2013. In quarter one of 2014, home movers took out 79,000 loans, a decrease of 19% compared to the previous quarter but up 20% on the same period last year.
The total number of loans taken out by home owners for remortgage in March was 2% higher than in February and 5% higher than in March 2013. Like other borrower types, remortgage lending fell in the first quarter of 2014 compared to the fourth quarter of 2013 by 6% in volume, but increased 14% compared to quarter one 2013.
Gross buy to let loans advanced increased in March by 10% compared to February and up 56% on March last year. First quarter results show gross buy to let loans advanced rose just 1% compared to the fourth quarter of 2013 but up 46% in volume compared to quarter one last year.
The CML data also shows that typical first time buyer income multiple decreased slightly, with first time buyers typically borrowing 3.41 times their gross income, compared to 3.42 in February. The typical loan size for first time buyers was £118,750 in March, which was unchanged from February. First time buyers' typical household income fell slightly to £35,704 in March from £36,000 in February.
It says that low mortgage interest rates have kept borrowers' payment burden low. First time buyers spent 19.3% of gross income on capital and interest payments, slightly more than the 19.2% in February.
Home owner remortgage activity in March increased to 25,000 loans, up 2% compared to February and an increase of 5% compared to March 2013. These loans totalled £3.6 billion in value, which was unchanged from the previous month but up 16% compared to March 2013.
Remortgage activity in the first quarter of 2014 showed the expected seasonal dip compared to the fourth quarter of 2013 dropping 6% to 78,200 loans in total. This, however, was an increase of 14% compared to the first quarter of 2013. The value of these loans totalled £11.5 billion, which again decreased by 7% compared to the previous quarter but was up 28% compared to quarter one 2013.
Buy to let lending saw a rise in March by both volume and value on the previous month. There were 16,200 loans advanced, up 56% compared to March 2013. The value of these loans totalled £2.2 billion, up by 69% compared to March 2013.
The number of new buy to let loans in the first quarter of 2014 rose slightly on the fourth quarter of 2013 to 47,000, up 1% on the previous quarter and 46% on the first quarter of 2013. The value of these loans was £6.3 billion, an increase on the fourth quarter of 2013 of 3% but up 54% compared to the first quarter of 2013.
Similarly, buy to let lending for house purchase increased to 8,040 loans advanced, up 8% compared to February and up 46% compared to March 2013. The loans totalled £960 million in March, which was up 8% on February and up 60% in value compared to the same month last year.
Buy to let lending for house purchase in the first quarter of 2014 followed a similar pattern to gross buy to let lending, remaining unchanged compared to the fourth quarter of 2013 with 23,610 loans advanced. This was however up 38% in volume compared to the first quarter of 2013. The value of these loans was £2.8 billion, up 3% quarter on quarter but up more substantially year on year compared to the first quarter of 2013 by 51%.
Buy to let remortgage lending saw the most substantial upward trend increasing month on month to 8,000 loans, up 13% in volume compared to February and up 67% compared to March 2013. These buy to let remortgages had a total value of £1.2 billion, up 13% compared to the previous month and up 73% compared to March 2013.
In the first quarter of 2014, buy to let remortgage lending remained consistent with the previous quarter totalling 23,000 loans, an increase of 1%, but a lager year on year increase on the first quarter of 2013 of 55%. These loans totalled in value £3.3 billion, which was again a modest increase of 3% on the fourth quarter of 2013 but up 67% on the first quarter of 2013.
‘All types of lending show positive year on year growth but the rate of increase is not as frenetic as at the end of 2013. Buy to let lending continues to recover and regain market share,’ said Paul Smee, director general of the CML.
He pointed out that the Financial Conduct Authority’s new regulation of mortgages has now been introduced, but it will still be some time until its effect on the market can be assessed.
‘The industry was ready for the transition, and already actively implementing many of the changes prior to April. We do not anticipate prolonged disruption to the market as a consequence. But we still see affordability constraints as an important factor in determining the level of demand for mortgages which we see over the next year,’ he added.
