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Number of loans to first-time buyers up 38% in January compared to January 2013

Published: 13 March 2014

New CML data released today on the profile of UK lending in January 2014, including first-time buyer, home mover, remortgagor and buy-to-let lending, shows:

  • The total number of home-owner loans for house purchase in January 2014 was down 16% compared to December 2013 but up 30% on January 2013.
  • The usual seasonal dip saw the number of first-time buyers and home movers fall in January compared to December 2013 but both increased substantially in comparison to a year previous in January 2013. 
  • Remortgage lending in January was up 10% in volume compared to December and also up 16% compared to January 2013.
  • Buy-to-let lending for house purchase increased 11% in January in volume compared to December 2013. Buy-to-let remortgage lending also increased 6% compared to December.

The Bank of England reported earlier this month that UK gross mortgage lending was £16.1 billion in January, which due to the expected seasonal dip was down slightly by 4% compared to December 2013 but up 39% compared to January 2013. 

Lending for home-owner house purchase

The total number of loans advanced to home-owners for house purchase decreased in January, down 16% compared to December but up 30% on January 2013. Overall, 48,600 loans were advanced in January with a total in value of £8bn, which was a decrease of 14% in value on December 2013 but a 43% increase in comparison to January 2013.

Chart 1: Number of loans for home-owner house purchase per month

13.03.2014 house purchase lending jan 2014

Source: CML RMS

Table 1: Loans for home-owner 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
2014
48,600 8,000 28,000 4,200
Change from
December 2013
-16.0% -14.0% 10.2% 10.5%
Change from
January 2013
30.3% 42.9% 15.7% 31.3%

Lending to first-time buyers

The total number of loans advanced to first-time buyers in January totalled 21,800, down 18% on December 2013, but an increase of 38% compared to January 2013. The total value of these loans was £3.1bn, down 16% on December 2013, but a year-on-year increase of 55% in comparison to January 2013.

The typical first-time buyer income multiple decreased, with first-time buyers typically borrowing 3.39 times their gross income in January, compared to 3.43 in December 2013. First-time buyers in January spent 19.3% of gross income to cover capital and interest payments, slightly higher than the 19.2% in December 2013 but down from 19.8% in January 2013. In addition, over 95% of first-time buyers opted for fixed rate mortgages in January.

It appears that the introduction of the Help to Buy mortgage guarantee scheme has started to have an impact on FTB deposit requirements.  The average loan-to-value for first-time buyers was 82% in January, up from 80% seen in December 2013 and a year previous in January 2013.

Chart 2: Number of loans advanced to first-time buyers per month

13.03.2014 first-time buyers graph Jan 2014

Source: CML RMS

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 Proportion of income spent on capital and interest payments
January 2014 21,800 3,100 82% 3.39 11.3% 19.3%
Change from
December 2013
-18.4% -16.2% 80% 3.43 11.1% 19.2%
Change from
January 2013
38.0% 55.0% 80% 3.23 12.9% 19.8%

Lending to home movers

The number of loans advanced to home movers for house purchase totalled 26,800 in January, down 15% in volume compared to December but up by 25% compared to January 2013. Home mover loans totalled £4.9bn in value in January, which was a month-on-month decrease of 13% compared to December, but up 36% compared to January 2013.

Chart 3: The number of loans advanced to home movers per month

13.03.2014 home mover graph Jan 2014

Source: CML RMS

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 Proportion of income spent on capital and interest payments
January
2014
26,800 4,900 70% 2.99 8.6% 18.6%
Change from
December 2013
-14.9% -12.5%  71% 3.04 8.4% 18.3%
Change from January 2013 24.7% 36.1% 69% 2.87 9.6% 18.9%

Lending for remortgage

In contrast to the month-on-month decrease in lending for home-owner house purchase, home-owner remortgage activity increased in January with a total of 28,000 remortgage loans advanced, up 10% in volume compared to December and up 16% compared to January 2013. These loans totalled £4.2bn in value, an increase of 11% on December and up 31% compared to January 2013.

Chart 4: Number of loans advanced for remortgage per month

13.03.2014 remortgage graph jan 2014

Source: CML RMS

Buy-to-let lending

Gross buy-to-let advances in January totalled 15,700 loans, which was up 8% compared to December 2013 and up 37% compared to January 2013. The value of these loans totalled £2.1bn, which was an increase of 11% compared to December and up 40% compared to January 2013. 

Similarly, Buy-to-let loans for house purchase followed the same trend up 11% in January to 8,100 loans in total compared to December, and up 34% compared to January last year. The loans totalled £900m in value, which again was up 7% compared to December and up 32% compared to January 2013. 

In parallel to this, buy-to-let remortgage lending increased in January to 7,500 loans, which was up 6% compared to December and up 42% compared to January 2013. These buy-to-let remortgages had a total value of £1.1bn, up 10% compared to December and a year-on-year increase of 55% compared to January 2013.

Chart 5: Number of buy-to-let loans advanced for house purchase and remortgage per month

13.03.2014 Buy-to-let graph Jan 2014

Source: CML RMS

Table 4: Loans for buy-to-let house purchase and remortgage

   Number of Gross BTL advances in period Value of Gross BTL advances, £m   Number of BTL house purchase loans Value of BTL house purchase loans, £m Number of BTL  
remortgage loans
Value of BTL remortgage
loans, £m
January
2014
15,700 2,100 8,100 900 7,500 1,100
Change from
December 2013
8.3% 10.5% 11.3% 7.1% 6.2% 10.0%
Change from January 2013 36.5% 40.0% 33.7% 32.4% 41.5% 54.9%

Paul Smee, director general of the CML, commented: 

"January is always a subdued month in the mortgage market but the underlying trend and strong year-on-year growth across all borrower groups indicates a strong start to 2014 continuing the sort of lending levels seen throughout 2013. Lending to first-time buyers and home movers has continued its upward trend and this, coupled with the growth in remortgage and buy-to-let activity, would suggest that all parts of the market are open for business."

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 for all home-owner mortgage data. Buy-to-let data is sourced from a sample of CML members and has been grossed to estimate the industry total. The CML began collecting monthly data in January 2013 and will from now on report monthly buy-to-let data in this press releases, alongside our home owner house purchase data.

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 2014 data will be released on Thursday 10 April 2014.

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