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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First-time buyer lending up 25% in June compared to a year ago

Published: 10 August 2016

On an unadjusted basis, in June:

  • Home-owners borrowed £12.3bn for house purchase, up 29% month-on-month and 12% year-on-year. They took out 68,200 loans, up 26% on May and 8% on June 2015.
  • First-time buyers borrowed £5.5bn, up 28% on May and 25% on June last year. This equated to 34,300 loans, up 24% month-on-month and 17% year-on-year. 
  • Home movers borrowed £6.9bn, up 33% on May and up 5% compared to a year ago. This represented 33,900 loans, up 28% month-on-month and up 0.3% on June 2015.
  • Remortgage activity totalled £5.6bn, up 8% on May and 6% compared to a year ago. This came to 32,400 loans, up 4% month-on-month but down 2% compared to a year ago.
  • Landlords borrowed £2.9bn, up 12% month-on-month but down 15% year-on-year. This came to 18,300 loans in total, up 8% compared to May and down 17% compared to June 2015.

On an unadjusted basis, in second quarter:

  • Home-owners borrowed £30bn for house purchase, down 2% quarter-on-quarter and 7% year-on-year. They took out 169,600 loans, up 4% on the first quarter and 3% on the same quarter in 2015.
  • First-time buyers borrowed £13.7bn, up 23% on the first quarter of the year and up 21% on the same quarter in 2015. This equated to 87,100 loans, up 23% month-on-month and 14% year-on-year. 
  • Home movers borrowed £16.4bn, down 16% on first quarter and 2% compared to a year ago. This represented 82,600 loans, down 10% quarter-on-quarter and 6% on the second quarter 2015.
  • Remortgage activity totalled £16.9bn, up 10% on the first quarter and 25% compared to a year ago. This came to 98,700 loans, up 10% quarter-on-quarter and 17% compared to a year ago.
  • Landlords borrowed £8bn, down 46% compared to the first quarter of the year and down 9% year-on-year. This came to 51,600 loans in total, a drop of 45% compared to the first quarter and down 11% year-on-year compared to the second quarter of 2015.

The CML now publishes seasonally adjusted monthly and quarterly 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 reveal growth in house purchase  activity and in particular for first-time buyers. As ever, there is uncertainty and it will take more time and patience to understand how the market will evolve in the current environment – these figures predominantly cover activity in the run-up to the referendum. We still believe that the mortgage market is well capitalised, resilient and open for business, and will remain so for the foreseeable future.

First-time buyers are continuing to drive house purchase lending, outperforming home movers for the third month running. More loans were advanced to them in June than at anytime since August 2007. Buy-to-let house purchase activity remains lower than before the stamp duty changes at the beginning of April, but showed a large month-on-month increase. As might be expected, buy-to-let remortgage seems to have been less affected by the changes and remains consistent with lending last year.

Home-owner house purchase lending in June

Affordability metrics for first-time buyers have remained relatively stable. The typical loan size increased to £135,400 from £131,400 in May, while the household income of borrowers also increasing slightly from £40,000 in May to £40,377 in June, which meant the income multiple went up from 3.51 to 3.55.

Home movers showed a similar trend with the average amount borrowed increasing to £171,000 from £166,000 in May, and the average household income of a home mover also increasing to £54,700 from £53,300. This meant the income multiple went down from 3.25 to 3.26 month-on-month.

Remortgage lending saw a month-on-month increase in May but a year-on-year decrease by volume.

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

 20160810 June 2016 MLT uk lending chart 1

Source: CML Regulated Mortgage Survey       


Buy-to-let lending in May

Gross buy-to-let lending, while lower than levels we saw last year, was 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 continues to be the driver of the market making up two-thirds of gross lending, however, buy-to-let house purchase grew month-on-month substantially whereas buy-to-let remortgage dipped slightly. 

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

 20160810 June 2016 MLT uk lending chart 2

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

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

June 2015

29,400

33,800

10,400

32,900

11,500

May 2016

27,600

26,400

4,500

31,100

12,100

June 2016

34,300

33,900

6,000

32,400

12,000

1 month change

+24.3%

+28.4%

+33.3%

+4.2%

-0.8%

12 month change

+16.7%

+0.3%

-42.3%

-1.5%

+4.3%

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q2 2015

76,600

87,600

27,900

84,400

29,500

Q1 2016

70,800

92,100

49,300

90,000

43,200

Q2 2016

87,100

82,600

14,700

98,700

36,000

Q1 change

+23.0%

-10.3%

-70.2%

+9.7%

-16.7%

Q4 change

+13.7%

-5.7%

-47.3%

+16.9%

+22.0%

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

 

House purchase (£m)

Remortgage (£m)

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

June 2015

4,400 6,600 1,400 5,300 2,000

May 2016

4,300 5,200 600 5,200 1,900

June 2016

5,500 6,900 900 5,600 2,000

1 month change

+27.9% +32.7% +50.0% +7.7% +5.3%

12 month change

+25.0% +4.5% -35.7% +5.7%

0.0%

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

 

House purchase (£m)

Remortgage (£m)

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

Q2 2015

11,300 16,800 3,800 13,500 5,000

Q1 2016

11,100 19,600 7,300 15,400 7,200

Q2 2016

13,700 16,400 2,100 16,900 5,800

Q1 change

+23.4% -16.3% -71.2% +9.7% -19.4%

Q4 change

+21.2% -2.4% -44.7% +25.2%

+16.0%

 

 20160810 June 2016 MLT home movers infographic V1

 20160810 June 2016 MLT First time buyers infographic V1

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 July 2016 data will be released on Wednesday 14 September 2016.

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Gareth Hill

020 7438 8922

Bernard Clarke

020 7438 8923