New data from the Council of Mortgage Lenders reveals a mixed picture on lending in December to November. However, on an annual basis, the value of lending grew across all lending types and the CML expects steady growth in the next two years.
First time buyers borrowed £4.5 billion for home owner house purchase, up 7% on November and 18% on December last year. This totalled 29,300 loans, up 6% month on month and 11% year on year.
Home movers borrowed £6.6 billion, up 2% on November and 20% year on year. This totalled 33,400 loans, up 3% month on month and 12% compared to December 2014.
However, home owner remortgage activity was down 16% by volume and 16% by value compared to November. Compared to December 2014, remortgage lending was up 14% by volume and up 24% by value.
Gross buy to let saw month on month decreases, down 3% by volume and 3% by value, but the growth year on year continued.
The data also shows that first time buyers took out 87,100 loans totalling £13.3 billion to purchase homes. This was up by volume 3% on the third quarter and 14% on the fourth quarter 2014 and by value it was up 3% quarter on quarter and 8% year on year.
Home movers took out 101,900 loans, down 1% quarter on quarter but up 9% compared to the fourth quarter 2014. This totalled £20.3 billion, down 3% on quarter three but up 18% year on year.
Home owner remortgage activity was up 4% by volume and 6% by value compared to the third quarter. Compared to the fourth quarter 2014, remortgage lending was up 21% by volume and up 35% by value.
Gross buy to let saw a slight quarter on quarter decrease, down 1% by volume and 1% by value, but year on year growth continues.
First time buyers borrowed £46.7 billion for home owner house purchase in 2015, which was up 4% on 2014. This totalled 311,700 loans, unchanged from the previous year. First time buyer lending was at its highest since 2007.
Home movers took out 365,800 loans, down 0.2% on 2014, but the amount borrowed totalled £72.1 billion was up 7% on 2014. Lending was at its annual highest since 2007.
Home owner remortgage activity was up 11% by volume and 20% by value compared to 2014. The value of remortgage lending was at its highest since 2008.
Gross buy to let also saw year on year increases, up 28% by volume and 39% by value. Buy to let lending was at its highest since 2007.
‘Improving economic conditions, boosted by government schemes like Help to Buy, saw the highest quarterly number of loans to purchase a home for eight years,’ said Paul Smee, director general of the CML.
‘The market has seen a gradual upward trajectory over the past few years, rather than rapid growth, and we'd expect this trend to continue with gross lending steadily increasing over the next two years,’ he added.
Kevin Purvey, chairman of Intermediary Mortgage Lenders Assciation (IMLA), expects the net set of figures to show an increase in buy to let lending ahead of the 3% stamp duty surcharge this April.
‘Although gross buy to let decreased both in volume and number of loans month on month, IMLA’s latest research shows that the government’s interventions in the private rental sector will not throw continued growth off course, and we predict gross buy to let lending to reach £48 billion in 2017,’ he said.
