From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

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  4. 23% more first-time buyers in January 2012 than January 2011

23% more first-time buyers in January 2012 than January 2011

Published: 13 March 2012

Both house purchase and remortgage lending fell in January, according to new data released today from the Council of Mortgage Lenders.

35,600 loans (worth £5.3 billion) were taken out for house purchase in January. This is a rise of 22% by volume and 23% by value from a year ago but a fall of 25% by volume and 24% by value on December 2011. This reflects the normal seasonal pattern where cold weather, lack of daylight and post-Christmas cash flow problems in January are likely to deter buyers from moving house.

Table 1: Loans for house purchase and remortgage

  Number of
house purchase
loans
Value of house
purchase loans
£m
 
Number of
remortgage
loans
 
Value of
remortgage
loans, £m
 
January 2012 35,600 5,300 26,600 3,500
Change from December 2011 -25% -24% -6% -3%
Change from January 2011 22% 23% -13% -5%

January saw a drop in both the number and value of loans taken out for remortgage. 26,600 loans (worth £3.5 billion) were taken out, down from 28,200 (worth £3.6 billion) in December. Remortgage lending experienced its first year-on-year fall since the end of 2010, with the number of loans down 13% and the value down 5% from January 2011. 

Table 2: First-time buyers, lending and affordability

 

Number of
loans

Value of
loans
£m

Average
loan to value

Average
income multiple

Proportion of
income spent on 
interest payments

January 2012 13,200 1,600 80% 3.20 12.2%
Change from December 2011 -30% -30% 80% 3.30 12.3%
Change from January 2011 23% 23% 79% 3.16 12.6%


The number of both first-time buyers and home movers in January increased from the year before but fell from December. The number and value of first-time buyer mortgages fell 30% from December but rose by 23% from January 2011.

Home mover numbers fell from 28,900 (worth £4.7 billion) in December to 22,400 (worth £3.6 billion) in January. Like first-time buyers, there was a significant increase in numbers from the previous January, when 18,600 home movers took out loans worth £3.1 billion.

Table 3: Home movers, lending and affordability

 

Number of
loans

Value of
loans
£m

Average
loan to value

Average
income multiple

Proportion of
income spent on 
interest payments

January 2012

22,400

3,600

70%

2.92

9.6%

Change from December 2011

-22%

-23%

70%

2.95

9.5%

Change from January 2011

20%

16%

67%

2.87

9.7%


For the last year, first-time buyers have borrowed on average 80% of their property and that was unchanged for January. The typical home mover borrowed 70% for the fourth month running.

First-time buyers continue to pay less of their income on mortgage interest, 12.2%, down from 12.3% in December. But as our recent article, To buy or not to buy, explained, in addition to interest payments, deposit and capital repayments form a large part of the payment burden for potential first-time buyers.

Director general of the CML Paul Smee said:

"We traditionally see a substantial fall in lending figures at the start of the year, reflecting the lack of enthusiasm by buyers to move house during the post-Christmas months, and this January has been no exception. But the year-on-year rise in house purchase lending suggests that lending levels are generally rising although we expect the trajectory to be bumpy rather than smooth this year.

"Average deposits for first-time buyers have stayed steady at around 20% for over a year but that figure may start to drift down gently over the coming months especially as NewBuy has been launched for new homes."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey.

3. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly Regulated Mortgage Survey and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender. Please see the mortgage statistics timeline on our website for further information.

4. The February 2012 data will be released on Monday 16 April 2012.

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