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 up 60% year-on-year in March

Published: 17 May 2016

On an unadjusted basis, lending in March:

  • Home-owners borrowed £13.8bn for house purchase, up 59% month-on-month and 60% year-on-year. They took out 69,800 loans, up 45% on February and 38% on March 2015.
  • First-time buyers borrowed £4.5bn, up 32% on February and 29% on March last year. This totalled 28,100 loans, up 28% month-on-month and 17% year-on-year. 
  • Home movers borrowed £9.3bn, up 75% on February and 82% compared to a year ago. This totalled 41,700 loans, up 60% month-on-month and 58% on March 2015.
  • Remortgage activity totalled £4.7bn, down 2% on February but up 7% compared to a year ago. This came to 28,000 loans, down 2% month-on-month but up 0.4% compared to a year ago.
  • Landlords borrowed £7.1bn, up 87% month-on-month and 163% year-on-year. This came to 45,000 loans in total, up 88% compared to February and up 142% compared to March 2015.

On an unadjusted basis, lending in the first quarter:

  • Home-owners borrowed £30.9bn for house purchase, down 9% quarter-on-quarter but up 33% year-on-year. They took out 164,200 loans, down 14% on the previous quarter but up 20% compared to the first quarter 2015.
  • First-time buyers borrowed £11.2bn, down 16% on the fourth quarter 2015 but up 22% on the first quarter last year. This totalled 71,500 loans, down 18% quarter-on-quarter but up 12% year-on-year. 
  • Home movers borrowed £19.7bn, down 4% quarter-on-quarter but up 40% compared to a year ago. This totalled 92,700 loans,  down 9% quarter-on-quarter but up 26% on quarter one 2015.
  • Remortgage activity totalled £15.4bn, up 2% on the fourth quarter 2015 and 25% compared to a year ago. This came to 90,100 loans, up 1% quarter-on-quarter and 15% compared to a year ago.
  • Landlords borrowed £14.6bn in the period, up 36% quarter-on-quarter and 92% year-on-year. This came to 92,700 loans in total, up 31% compared to the fourth quarter 2015 and 77% compared to the first quarter 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:

Activity was distorted in March due to a rush to beat the introduction of changes to stamp duty on second properties in April, alongside the seasonal uptick in activity before Easter. While the increases are substantial, these supercharged levels of activity are likely to be temporary and will fall back over the summer months.

 

For more in-depth analysis, CML economist Mohammad Jamei examined the potential reasons behind the underlining trends in lending this month.

Home-owner house purchase lending in March

This is the most amount of loans taken out in a monthly period for house purchase since June 2014 and the most amount borrowed for house purchase since August 2007. This was mainly driven by home mover activity with the most amount of loans in a monthly period for home movers since November 2007 and the most amount home movers have borrowed in a monthly period since August 2007. In contrast, first-time buyers while showing growth were only at levels by volume and by value seen in December 2015.

Affordability metrics for first-time buyers have remained relatively stable as even though the amount borrowed increased to £133,000 from £129,000 last month this was offset by the total household income of borrowers increasing from £39,500 in February to £40,549 in March. The amount first-time buyers are spending of their monthly gross income to service capital and interest repayments was 18.0%, which was the lowest level since we began tracking this metric in 2005. Home movers are also paying at record low proportions of income at 17.8%, down from 18.1% in February and March last year, and much lower than the recent peak of 23.8% in December 2007.

Remortgage lending to home-owners saw a decline compared to the previous month but a slight upturn compared to March last year. On a quarterly basis, however, this was the most amount of remortgage loans taken out in a quarter since the fourth quarter 2011 and the most amount borrowed for remortgage in a quarter since the first quarter of 2009.  

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

 20160516 March 2016 MLT Chart 1

Source: CML Regulated Mortgage Survey       

Buy-to-let lending in March

Gross buy-to-let lending was at its highest quarterly level by volume since the third quarter of 2007 and the most amount borrowed in a quarter since we began tracking this metric by quarter in the third quarter of 2006. Both buy-to-let house purchase and buy-to-let remortgage saw substantial increases within this period borrowing almost identical amounts.  

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

 20160516 March 2016 MLT 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

March 2015

24,100

26,400

8,800

27,900

9,600

February 2016

22,000

26,100

10,400

28,600

13,200

March 2016

28,100

41,700

28,700

28,000

15,800

1 month change

+27.7%

+59.8%

+176.0%

-2.1%

+19.7%

12 month change

+16.6%

+58.0%

+226.1%

+0.4%

+64.6%

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

March 2015

3,500 5,100 1,100 4,400 1,600

February 2016

3,400 5,300 1,500 4,800 2,200

March 2016

4,500 9,300 4,300 4,700 2,700

1 month change

+32.4% +75.5% +186.7% -2.1% +22.7%

12 month change

+28.6% +82.4% +290.9% +6.8% +68.8%

20160516 MLT March 2016 infographic 1 FTBs

20160516 MLT March 2016 infographic 2 home movers

 

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 April 2016 data will be released on Wednesday 15 June 2016.

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