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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Remortgages on the rise in January, CML data shows

Published: 10 March 2016

On an unadjusted basis, lending in January:

  • Home-owners borrowed £8.4bn for house purchase, down 25% month-on-month but up 12% year-on-year. They took out 46,200 loans, down 27% on December but up 5% on January 2015.
  • First-time buyers borrowed £3.3bn in January, down 27% on December but up 14% on January last year. This totalled 21,400 loans, down 28% month-on-month but up 6% year-on-year. 
  • Home movers borrowed £5.1bn, down 24% on December but up 11% compared to a year ago. This totalled 24,800 loans, down 26% month-on-month but up 3% on January 2015.
  • Home-owner remortgagors borrowed £5.8bn, up 35% on December and 32% compared to a year ago. This totalled 33,100 loans, up 28% month-on-month and 19% compared to a year ago.
  • Landlords borrowed £3.7bn in January, up 9% month-on-month and 42% year-on-year. This came to 23,100 loans in total, of which 13,400 were for remortgage, up 3% compared to December and up 31% compared to January 2015.

The CML this month also introduces publication of seasonally adjusted monthly data (click here to download table), alongside the unadjusted data. This makes it easier to spot underlying trends.

Paul Smee, director general of the CML, commented:

We are now pleased to be able to analyse monthly lending on a seasonally adjusted basis. While the unadjusted data appears to show large falls in January compared to December, stripping out the usual January lull we see a general picture of flat house purchase lending but a significant uptick in remortgage activity, as borrowers continue to seek attractive new deals despite the lower-for-longer expectations for interest rates.

Home owner lending

In line with the expected seasonal dip in activity, the number of first-time buyers was at its lowest monthly level since February 2015. Looking through seasonal factors, lending was flat in January, compared to December 2015. However, affordability was slightly improved this month with average loan sizes and loan-to-income multiples decreasing compared to December. The proportion of income first-time buyers are committing to capital and interest repayments remained at its lowest level since records began in 2005.

Home mover activity was also affected by the seasonal lull, with January experiencing the lowest number of home mover loans advanced for house purchase since February 2015. However, average loan size decreased and average household income increased month-on-month, meaning income multiples decreased for home movers and the percentage of monthly household income spent to service capital and interest repayments also decreased.

In contrast to house purchase lending, remortgage lending to home-owners saw substantial increases month-on-month (and year-on-year), resulting in the highest lending borrowed in a single month for remortgage in the UK since January 2009.

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

20160309 Jan 2016 MLT release Chart 1: Number of loans to home-owners, 2007-2016          

Source: CML Regulated Mortgage Survey       


Buy-to-let lending

The number of loans for buy-to-let house purchase dipped in January compared to December. However, the value of total buy-to-let lending increased due to continually strong buy-to-let remortgage activity. The number of buy-to-let remortgages in January was at the highest monthly level since we began tracking monthly buy-to-let lending in January 2013.

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

 20160309 Jan 2016 MLT release Chart 1: Number of loans to buy-to-let, 2007-2016

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

January 2015

20,100

24,000

7,800

27,800

9,700


December 2015

 

29,500

 

33,700

 

10,300

 

25,800

 

11,900


January 2016


21,400

 

24,800

 

9,500

 

33,100

 

13,400

1 month change

-27.5%

-26.4%

-7.8%

+28.3%

+12.6%

12 month change

+6.5%

+10.9%

+21.8%

+19.1%

+38.1%

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

January 2015

2,900

4,600

1,000

4,400

1,500

December 2015  

4,500

 

6,700

 

1,400

 

4,300

 

1,900

January 2016

 

3,300

 

5,100

 

1,400

 

5,800

 

2,200

1 month change

-26.7%

-23.9%

Unchanged

+34.9%

+15.8%

12 month change

+13.8%

+10.9%

+40.0%

+31.8%

+46.7%

January first-time buyer affordability measures

 

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

January 2015

122,720

38,000

83.5%

3.35

11.2%

19.1%


December 2015


130,999


39,485

 
 

80.4%

 

3.49

 

9.6%

 

18.2%


January 2016

 

128,960


39,558

 
 

84.3%

 

3.45


9.5%

 
 

18.2%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

January home mover affordability measures

 

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

January 2015

156,750

53,405

72.7%

3.02

8.6%

18.6%


December 2015


166,875

 

54,231

 

73.2%

 

3.21


7.7%

 
 

18.1%


January 2016

 

166,794

 

54,382

 

72.7%

 

3.17

 

7.6%

 

18.1%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

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. From this month on, we will be publishing seasonally adjusted data alongside our non-seasonally adjusted data. This will include seasonally adjusted data for house purchase and remortgage activity for both home-owners and buy-to-let, by number and values.

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 February 2016 data will be released on Wednesday 13 April 2016.

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