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Home buyer activity in April down on March but up on a year ago

Published: 13 June 2017

On a non-seasonally adjusted basis, lending in April:

  • Home buyers borrowed £9.6bn, down 14% on March but up 19% on April 2016. This came to 51,200 loans, down 16% on March but up 9% on April 2016.
  • Within this, first-time buyers borrowed £4.1bn, down 16% on March but up 8% on April 2016. They took out 25,400 loans, down 18% month-on-month but up 2% year-on-year. 
  • Meanwhile, home movers borrowed £5.5bn, down 11% on March but up 28% year-on-year. This equated to 25,700 loans, down 15% month-on-month but up 17% compared to April 2016.  
  • Home-owner remortgage activity was down 16% by value and 18% by volume on March. Compared to a year ago, remortgage lending was down 15% by value and 16% by volume. 
  • Gross buy-to-let saw month-on-month decreases, down 17% by value and 16% by volume. Compared to April 2016, the number of loans increased 1% and the amount borrowed remained unchanged. 

Paul Smee, director general of the CML, commented:

April comparisons are distorted by the weakness last year following the stamp duty changes, and the normal seasonal lending surge in March. But the seasonally-adjusted picture shows lending relatively unchanged month-on-month across all lending segments.

Heading into the summer months, we expect the market to remain slightly lopsided. Buy-to-let and home movers may well remain subdued, as they have been for the last six months. But both first-time buyer and remortgage lending should maintain momentum on the coattails of the attractive deals available. 

Home-owner house purchase and remortgage lending

On a seasonally adjusted period, first-time buyers and home movers went up by value and remained relatively unchanged by volume compared to March. Buy-to-let and remortgage activity also remained relatively unchanged in April from March. Full seasonally and non-seasonally adjusted data can be downloaded at the bottom of the page.

The proportion of household income used to service capital and interest rates continued to be near historic lows in April for both first-time buyers and home movers at 17.3% and 17.5% respectively.

Affordability metrics for first-time buyers saw the typical loan size increase from £133,500 in March to £136,500 in April. The average household income increased to £40,700 from £40,000. This meant the income multiple went from 3.53 to 3.57.

The average amount borrowed by home movers in the UK increased to £176,500 from £172,400 the previous month, while the average home mover household income increased month-on-month from £54,100 to £55,200. The income multiple for the average home mover went up to 3.35 from 3.34.

Chart 1: Number of loans to home-owners, 2007-2017

20170609 MLT April 2017 Chart 1

Source: CML Regulated Mortgage Survey 

Buy-to-let lending in April

Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. The number of loans for buy-to-let house purchase advanced in April remained low compared to activity seen before the change on stamp duty on second properties introduced in April last year. 

Chart 2: Number of loans for buy-to-let

20170609 MLT April 2017 Chart 2

Source: CML Economics (pre-2013 data based on quarterly data)

Table 1: Number of loans for house purchase and remortgage in April

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

April 2016

24,800 22,000 4,200 34,700 11,800

March 2017

31,100 30,100 6,700 35,800 12,500

April 2017

25,400 25,700 5,300 29,300 10,800

1 month change

-18.3% -14.6% -20.9% -18.2% -13.6%

12 month change

+2.4% +16.8% +26.2% -15.6% -8.5%

Table 2: Value of loans for house purchase and remortgage in April

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Buy-to-let Home owners Buy-to-let

April 2016

3,800 4,300 600 6,000 1,900

March 2017

4,900 6,200 900 6,100 1,900

April 2017

4,100 5,500 800 5,100 1,700

1 month change

-16.3% -11.3% -11.1% -16.4% -10.5%

12 month change

+7.9% +27.9% +33.3% -15.0% -10.5%

 20170612 April 2017 FTBs infographic v1

20170612 April 2017 home movers infographic v1

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. Source: CML Regulated Mortgage Survey for all home-owner mortgage 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 May 2017 data will be released on Wednesday 12 July 2017.

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