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. July house purchase lending down 13% on June

July house purchase lending down 13% on June

Published: 14 September 2016

On an unadjusted basis, in July:

  • Home-owners borrowed £10.6bn for house purchase, down 13% month-on-month and 12% year-on-year. They took out 58,100 loans, down 14% on June and 13% on July 2015.
  • First-time buyers borrowed £4.4bn, down 19% on June and 4% on July last year. This equated to 28,200 loans, down 17% month-on-month and 6% year-on-year. 
  • Home movers borrowed £6.2bn, down 9% on June and 16% compared to a year ago. This represented 29,900 loans, down 11% month-on-month and 19% on July 2015.
  • Remortgage activity totalled £6bn, up 7% on June and 20% compared to a year ago. This came to 33,400 loans, up 3% month-on-month and 10% compared to a year ago.
  • Landlords borrowed £3bn, up 3% month-on-month but down 21% year-on-year. This came to 18,600 loans in total, up 1% compared to June and down 26% compared to July 2015.

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

Paul Smee, director general of the CML, commented:

These figures cover the  first full month of lending following the EU referendum. They show a month-on-month decline in first-time buyer and home mover activity and  muted activity on the BTL market. It is hard to determine whether these figures reflect a first uncertain reaction to the referendum vote, or are a sign of a market which was already cooling.  It will be quite some time before a full assessment can be made. We do believe that the Buy-to-let lending market is still readjusting after the large level of activity before the changes to stamp duty on second properties in April.

Remortgage lending on the other hand has continued to grow, and reacted with a 7-year monthly high. Borrowers seem keen to take advantage of the wide range of competitive deals in the market and, following the base rate cut in August, this is likely to continue.

Home-owner house purchase lending

While first-time buyer lending was down in July compared to June, however, the number of loans advanced to first-time buyers was the second highest monthly level of the year so far. Home mover activity was at its third highest monthly level this year by volume and by value in July, after March and June. On a seasonally adjusted basis, first-time buyers and home movers decreased by volume 13% and 7% respectively in July compared to June, but the number of loans to first-time buyers increased 8% compared to July last year, while the number of loans to home movers decreased 7% year-on-year.

Affordability metrics for first-time buyers have remained relatively stable. The typical loan size decreased to £133,000 in July from £135,700 in June, while the average household income of borrowers purchasing their first home also decreased slightly from £40,400 in June to £40,100 in July, which meant the income multiple was unchanged at 3.55.

The average amount borrowed by home movers in the UK increased to £171,400 in July from £171,000 in June, and the average household income of a home mover also increased to £55,000 from £54,700. This meant the income multiple went up from 3.26 to 3.29 month-on-month.

Remortgage lending saw a month-on-month and year-on-year growth in July. £6bn was borrowed in total in the month for remortgage which, alongside April 2016, is the highest monthly amount borrowed for remortgage since January 2009.

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

 20160912 July 2016 MLT press release chart 1

Source: CML Regulated Mortgage Survey 

Buy-to-let lending in July

Gross buy-to-let lending, while lower than levels we saw last year, saw the highest monthly levels of activity by volume and by value since the stamp duty changes on second properties came in on April 1. Buy-to-let remortgage lending continues to be the driver, making up two-thirds of gross lending.

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

20160912 July 2016 MLT press release chart 2

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

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

July 2015

29,900

37,000

11,800

30,300

13,200

June 2016

34,100

33,600

6,100

32,300

12,100

July 2016

28,200

29,900

6,000

33,400

12,300

1 month change

-17.3%

-11.0%

-1.6%

+3.4%

+1.7%

12 month change

-5.7%

-19.2%

-49.2%

+10.2%

-6.8%

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

 

House purchase (£m)

Remortgage (£m)

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

July 2015

4,600 7,400 1,600 5,000 2,200

June 2016

5,400 6,800 900 5,600 2,000

July 2016

4,400 6,200 900 6,000 2,100

1 month change

-18.5% -8.8% +0.0% +7.1% +5.0%

12 month change

-4.3% -16.2% -43.8% +20.0%

-4.5%

 

20160912 july uk lending FTB release infographic

20160912 july uk lending Home mover release 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 August 2016 data will be released on Wednesday 12 October 2016.

Contact us

Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924

Bernard Clarke

020 7438 8923