Home lending in the UK fell in December with buy to let down steeply

Mortgage lending for first time buyers, home movers and buy to let purchases all fell in December 2017 compared to the previous year, the latest trends data shows.

However, 2017 overall saw the highest number of first time buyers for a decade at 365,000, an annual increase of 7.4% from 340,000 in 2016.

The £5.1 billion of new lending in December was 1.9% down year on year and in the buy to let market the downward trend has continued with a steep fall in lending, according to the figures from UK Finance.

There were 30,800 new first time buyer mortgages completed in December, down 5.2% compared to the same month in 2016. The data also reveals that the average first time buyers is no aged 30 and has an income of £41,000.

The figures also show that there were 30,700 new home mover mortgages completed in December, down 4.7% year on year. The £6.5 billion of new lending in the month was 3% down year on year. The average home mover is 39 and has an income of £55,000.

There were 30,500 new home owner remortgages completed in December, some 7.4% more than in the same month a year earlier. The £5.2 billion of remortgaging in the month was 8.3% up year on year.

There were 5,300 new buy to let house purchase mortgages completed in December, down 17.2% than in December 2016. By value this was £0.8 billion of lending in the month, down 11.1% year on year.

There were 9,900 new buy to let remortgages completed in December, some 11.6% fewer than in the same month a year earlier. By value this was £1.6 billion of lending in the month, 11.1% down year on year.

According to Paul Smee, head of mortgages at UK Finance, the fact that 2017 saw the number of first time buyers reach its highest level in a decade, is welcome news for those getting started on the housing ladder.

‘But although the market remains competitive there is no room for complacency, with weaker December figures consistent with our market forecast of subdued growth this year. We are also seeing a less buoyant buy to let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year,’ he said.

Steve Seal, director of sales and distribution at Bluestone Mortgages, there is still a larger group of people that are not being treated fairly when it comes to the mortgage application process.

‘Successful business owners, entrepreneurs or contractors are being turned away by high street lenders for not fitting traditional lending criteria. Yet it is this group of workers who are the backbone to our UK economy and need greater support from the wider industry,’ he said.

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