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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Home-owner house purchase lending down in April

Published: 15 June 2016

On an unadjusted basis, lending in April:

  • Home-owners borrowed £8.1bn for house purchase, down 40% month-on-month and 4% year-on-year. They took out 47,300 loans, down 31% on March and 5% on April 2015.
  • First-time buyers borrowed £3.9bn, down 11% on March but up 15% on April last year. This equated to 25,100 loans, down 9% month-on-month but up 7% year-on-year. 
  • Home movers borrowed £4.3bn, down 53% on March and 14% compared to a year ago. This represented 22,200 loans, down 46% month-on-month and 15% on April 2015.
  • Remortgage activity totalled £6bn, up 25% on March and 40% compared to a year ago. This came to 34,800 loans, up 23% month-on-month and 30% compared to a year ago.
  • Landlords borrowed £2.5bn, down 65% month-on-month and 7% year-on-year. This came to 16,100 loans in total, down 64% compared to March and down 10% compared to April 2015.

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

Paul Smee, director general of the CML, commented:

There is a sense of calm after the storm this month, as lending eased back, following the significant rises in activity in March as borrowers looked to beat the second property stamp duty deadline. We expect the market to take several months to return to its previous levels after the lending surge.

Home-owner house purchase lending in April

The stamp duty change on second properties that came into effect on April 1 resulted in activity across the market being brought forward into March causing an expected slowdown in April’s lending figures in the aftermath. As a result, house purchase activity experienced a sharp fall month on month, which was especially evident for buy-to-let.

Affordability metrics for first-time buyers have remained relatively stable. Even though the typical loan size decreased to £129,950 from £133,000 last month, this was offset by the household income of borrowers also decreasing slightly from £40,600 in March to £39,700 in April, which meant the income multiple stayed the same at 3.46.

Home movers showed a similar trend with the average amount borrowed decreasing to £163,000 from £180,000 in March, and the average household income of a home mover also decreasing from £58,400 to £52,500, causing the income multiple to go up from 3.21 to 3.26 month-on-month.

Remortgage lending was the only lending type to show both month-on-month and year-on-year increases in April. April saw the highest volume of loans for remortgage in a month since July 2009, and the highest lending value for remortgage since January 2009. 

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

 20160615 April 2016 MLT press release chart one

Source: CML Regulated Mortgage Survey       

Buy-to-let lending in April

Gross buy-to-let lending dipped as expected, after the rush in activity to beat the stamp duty changes on second properties ahead of the April 1 deadline. This was the lowest volume of loans for buy-to-let lending since June 2014. The drop in activity was more prevalent in buy-to-let house purchase lending than in buy-to-let remortgage activity. 

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

april uk lending press release chart 2

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

Table 1: Number of loans for house purchase and remortgage

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

April 2015

23,500

26,200

8,600

26,700

9,100

March 2016

27,600

41,300

28,700

28,200

15,800

April 2016

25,100

22,200

4,200

34,800

11,700

1 month change

-9.1%

-46.2%

-85.4%

+23.4%

-25.9%

12 month change

+6.8%

-15.3%

-51.2%

+30.3%

+28.6%

Table 2: Value of loans for house purchase and remortgage

 

House purchase (£m)

Remortgage (£m)

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

April 2015

3,400 5,000 1,200 4,300 1,500

March 2016

4,400 9,200 4,300 4,800 2,700

April 2016

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

1 month change

-11.4% -53.3% -86.0% +25.0% -29.6%

12 month change

+14.7% -14.0% -50.0% +39.5% +26.7%

 

20160614 MLT April 2016 first time buyers infographic v1

20160614 MLT April 2016 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 95% 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 2016 data will be released on Wednesday 13 July 2016.

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