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.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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  4. August house purchase lending up 11% compared to a year ago

August house purchase lending up 11% compared to a year ago

Published: 12 October 2016

On an unadjusted basis, in August:

  • Home-owners borrowed £12.2bn for house purchase, up 14% month-on-month and 11% year-on-year. They took out 66,000 loans, up 13% on July and 9% on August 2015.
  • First-time buyers borrowed £5.1bn, up 13% on July and 24% on August last year. This equated to 31,800 loans, up 12% month-on-month and 19% year-on-year. 
  • Home movers borrowed £7.1bn, up 15% on July and 3% compared to a year ago. This represented 34,200 loans, up 14% month-on-month and 1% on August 2015.
  • Remortgage activity totalled £5.9bn, down 2% on July but up 41% compared to a year ago. This came to 34,900 loans, up 4% month-on-month and 40% compared to a year ago.
  • Landlords borrowed £3bn, unchanged month-on-month but down 12% year-on-year. This came to 19,400 loans in total, up 4% compared to July but down 13% compared to August 2015.

The CML now publishes seasonally adjusted monthly data (click here to download), alongside the normal unadjusted data. This makes it easier to spot underlying trends.

Paul Smee, director general of the CML, commented:

House purchase activity bounced back from a dip in July, reflecting resilience in first-time buyer activity.  Mortgage rates remain at or close to historic lows, and the re-pricing of mortgages following August’s base rate cut should help to underpin a continuing, strong appetite for home-ownership over the coming months.

Buy-to-let by contrast continues to operate at lower levels five months after the stamp duty change on second properties. This appears to be a long-term trend, and with lenders potentially tightening affordability checks ahead of the tax changes in April 2017, activity on the buy-to-let house purchase side may well remain at current levels.

Home-owner house purchase lending

Both the number and the value of first-time buyer loans grew on a seasonally adjusted basis, as well as the unadjusted raw data. The monthly number of first-time buyers in August was the second highest of 2016.

The number of home mover loans was also the second highest monthly figure of 2016, after March, and the highest August level since 2013, but on a seasonally adjusted basis lending to home movers was weaker than to first-time buyers.

Affordability metrics for first-time buyers have remained relatively stable. The typical loan size increased to £136,300 in August from £133,000 in July, against average household income up slightly from £40,200 in July to £40,900 in August. This meant the income multiple was slightly up from 3.55 to 3.56.

The average amount borrowed by home movers in the UK increased to £175,000 in August from £172,000 in July, while the average home mover household income also increased to £55,400 from £55,000. The income multiple for the average home mover went from 3.29 to 3.27 month-on-month.

The number of home-owner remortgages rose to reach its highest monthly level since July 2009, although by value remortgaging was lower than the previous month.

Chart 1: Number of loans to home-owners, 2007-2016

20161012 chart 1 lending press release

Source: CML Regulated Mortgage Survey 

Buy-to-let lending in August

Gross buy-to-let lending remained substantially down on year earlier levels but there were 1,000 more buy-to-let loans in August than in July. Nearly two thirds of buy-to-let loans were remortgages rather than house purchase.

Chart 2: Number of loans for buy-to-let, 2007-2016

20161012 chart 2 lending press release 

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

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

August 2015

26,700

33,700

10,600

25,000

11,500

July 2016

28,300

30,000

6,000

33,500

12,300

August 2016

31,800

34,200

6,500

34,900

12,800

1 month change

+12.4%

+14.0%

+8.3%

+4.2%

+4.1%

12 month change

+19.1%

+1.5%

-38.7%

+39.6%

+11.3%

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

 

House purchase (£m)

Remortgage (£m)

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

August 2015

4,100 6,900 1,400 4,200 1,900

July 2016

4,500 6,200 900 6,000 2,100

August 2016

5,100 7,100 1,000 5,900 2,000

1 month change

+13.3% +14.5% +11.1% -1.7% -4.8%

12 month change

+24.4% +2.9% -28.6% +40.5%

+5.3%

 20161012 August 2016 FTBs infographic

20161012 August 2016 home movers infographic

 

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 September 2016 data will be released on Tuesday 15 November 2016.

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