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.

  1. Home
  2. News
  3. Press releases
  4. Mixed picture in December but first-time buyer lending healthy, says CML

Mixed picture in December but first-time buyer lending healthy, says CML

Published: 14 February 2017

Lending in December:

  • Home-owner house purchase lending totalled £11.6bn in December, up 5% on November and 3% on December 2015. This came to 63,600 loans, up 5% on November and 0.2% on December 2015.
  • First-time buyers borrowed £5.1bn for home-owner house purchase, up 9% on November and 13% on December 2015. This totalled 32,000 loans, up 7% month-on-month and 8% year-on-year. 
  • Home movers borrowed £6.5bn, up 3% on November but down 3% year-on-year. This totalled 31,600 loans, up 3% month-on-month but down 7% compared to December 2015.  
  • Home-owner remortgage activity was down 21% by volume and by value compared to November. Compared to December 2015, remortgage lending was up 7% by volume and by value. 
  • Gross buy-to-let saw month-on-month decreases, down 15% by volume and 7% by value. Compared to December 2015, the number of loans decreased 21% and the value of these loans decreased 18%.    

Lending in the fourth quarter of 2016:

  • Home-owner house purchase lending fell in the fourth quarter to £33.1bn, down 3% on the third quarter and 2% on the same quarter 2015. This totalled 182,000 loans, down 2% on the previous quarter and 4% on the final period of 2015.
  • First-time buyers took out 90,800 loans totalling £14.3bn to purchase homes. This was down 1% by volume and value on the third quarter, but up 4% by volume and 7% by value year-on-year. 
  • Home movers took out 91,300 loans, down 4% quarter-on-quarter and 11% compared to the fourth quarter 2015. This came to £18.7bn, down 6% on quarter three and 9% year-on-year. 
  • Home-owner remortgage activity came to £16.6bn, down 5% on the previous quarter but up 10% on the fourth quarter 2015. The number of remortgage loans came to 97,500, down 3% on the third quarter but up 9% on the same quarter in 2015. 
  • Gross buy-to-let lending decreased to £6bn, down 2% on the previous quarter and 3% on the same quarter in 2015. This totalled 57,400 loans, up 2% quarter-on-quarter but down 20% year-on-year.   

Lending in 2016:

  • Home buyers borrowed £127.7bn in 2016, up 7% on 2015. This came to 698,900 loans, up 3% on 2015.
  • First-time buyers borrowed £53.2bn for home-owner house purchase in 2016, up 13% on 2015. This totalled 338,900 loans, up 8% from the previous year. First-time buyer borrowed more in 2016 than any other year since our records began in 1974.
  • Home movers took out 360,300 loans, down 2% on 2015, but the amount borrowed totalled £74.3bn which was up 3% on 2015. 
  • Home-owner remortgage activity was up 14% by volume and 20% by value compared to 2015. The number of remortgage loans was at its highest since 2009.
  • Gross buy-to-let also saw year-on-year increases, up 3% by volume and 7% by value, with remortgage business accounting for nearly two thirds of the total. 

Breakdown of total value of mortgage loans per year in the UK

   Home-owner house purchase (in £millions) Buy-to-let gross lending (in £millions) 
  First-time buyers Home movers Remortgage BtL house purchase BtL remortgage
2007 47,200 107,500  129,200  23,100 20,600
2008  23,900  51,800  118,400  12,200  14,600
2009  22,000  47,300  51,800  4,500  3,400

2010

 24,100  54,700  39,600  4,600  3,600

2011

 23,800  51,700  46,700  6,200  6,400

2012

 27,500  53,900  41,400  7,400  7,600

2013

 36,100  58,100  45,100  9,300  10,700

2014

 44,800  67,200  45,400  12,400  14,500

2015

 46,900  72,400  55,200  15,600  21,900

2016

 53,200  74,300  66,200  14,900  25,100

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Paul Smee, director general of the CML, commented:

2016 could have been a potentially destabilising year of regulatory and political change, but the mortgage market has been resilient and adaptable. Home-owner house purchase lending increased, though the buy-to-let sector's positive lending performance has been driven primarily by remortgaging. We do not expect the market volumes to show a year-on-year increase in 2017, instead it will remain similar to that achieved in 2016.

Home-owner house purchase lending in December

The proportion of household income used to service capital and interest rates reached another historic low this month for both first-time buyers and home movers at 17.4% and 17.5% respectively.

Affordability metrics for first-time buyers saw the typical loan size increase from £134,100 in November to £136,000 in December. The average household income increased to £40,400 from £40,100. This meant the income multiple went from 3.54 to 3.57.

The average amount borrowed by home movers in the UK increased to £175,000 in December from £170,900 in November, while the average home mover household income increased slightly to £55,000 from £54,800. The income multiple for the average home mover went from 3.27 to 3.32. 

On a seasonally adjusted basis, remortgage and buy-to-let activity differed markedly from the unadjusted figures. While remortgage lending decreased 21% on November on an unadjusted basis, on a seasonally adjusted basis it was a decline of only 2%. Buy-to-let lending was unchanged on a seasonally adjusted basis in December compared to the previous month and December 2015, despite the non-seasonally adjusted levels showing a decline.

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

20170214 uk lending MLT pr chart 1

Source: CML Regulated Mortgage Survey 

Buy-to-let lending

Gross buy-to-let lending decreased in December from November. However, of the three quarters after the stamp duty changes in April, gross quarterly lending was its highest by volume and by value in the final quarter of 2016. 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

20170214 uk lending MLT pr chart 2

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

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

December 2015

29,600

33,800 10,300 26,000

11,900

November 2016

30,000 30,800 6,700 34,900

14,000

December 2016

32,000

31,600 6,400 27,700

11,200

1 month change

 +6.7%  +2.6% -4.5% -20.6%

-20.0%

12 month change

 +8.1%

 -6.5% -37.9%

+6.5%

-5.9%

Table 2: Number of loans for house purchase and remortgage in the fourth quarter

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q4 2015

87,600

102,600 31,600 89,600

38,200

Q3 2016

91,300 95,400 19,000 100,000

36,800

Q4 2016

90,800

91,300 19,300 97,500

37,300

1 quarter change

 -0.5%  -4.3% -1.6% -2.5%

+1.4%

4 quarter change

 +3.7%

 -11.0%

-38.9%

+8.8%

-2.4%

Table 3: Value of loans for house purchase and remortgage in December

 

House purchase (£m)

Remortgage (£m)

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

December 2015

4,500 6,700 1,400 4,300 1,900

November 2016

4,700 6,300 900 5,800 2,200

December 2016

5,100 6,500 900 4,600 1,800

1 month change

+8.5% +3.2% 0% -20.7% -18.2%

12 month change

+13.3% -3.0% -35.7% +7.0% -5.3%

Table 4: Value of loans for house purchase and remortgage in the fourth quarter 2016

 

House purchase (£m)

Remortgage (£m)

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

Q4 2015

13,400 20,500 4,300 15,100 6,200

Q3 2016

14,400 19,800 2,800 17,400 6,100

Q4 2016

14,300 18,700 2,700 16,600 6,000

1 quarter change

-0.7% -5.6% -3.6% -4.6% -1.6%

4 quarter change

+6.7% -8.8% -37.2% +9.9% -3.2%

 20170214 MLT December 2016 first time buyers infographic

20170214 MLT December 2016 home mover 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 January 2017 data will be released on Tuesday 14 March 2017.

Contact us

Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924

Bernard Clarke

020 7438 8923