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 activity continues to grow in June

Published: 15 August 2017

On a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in June rose:

  • First-time buyers borrowed £5.9bn, up 26% on the previous month and 9% on June 2016. This equated to 36,000 loans, up 22% month-on-month and 6% year-on-year.
  • Home movers borrowed £7.8bn, up 26% on May and 15% year-on-year. This equated to 36,500 loans, up 24% month-on-month and 9% compared to a year ago.
  • Home-owner remortgage activity totalled £6bn, up 5% by value on May and 7% on a year ago. The number of remortgage loans totalled 34,300, up 5% month-on-month and 6% on a year ago.
  • Gross buy-to-let totalled £3.0bn, up 3% on May and up 3% compared to June 2016. These equated to 19,700 loans, up 3% month-on-month and 6% year-on-year.

On a non-seasonally adjusted basis, UK Finance shows that mortgage lending in the second quarter also rose:

  • Home buyers borrowed £34.4bn, up 18% on Q1 and 24% on Q2 2016. This equated to 183,300 loans, up 16% on Q1 and 9% on Q2 2016.
  • Within this, first-time buyers borrowed £14.8bn, up 18% on last quarter and 10% on Q2 2016. They took out 91,400 loans, up 15% quarter-on-quarter and 6% year-on-year.
  • Home movers borrowed £19.6bn, up 19% on Q1 and 21% year-on-year. This equated to 92,200 loans, up 17% quarter-on-quarter and 13% compared to a year ago.
  • Home-owner remortgage activity totalled £16.9bn, down 11% by value on Q1 but up 1% on a year ago. The number of remortgage loans totalled 96,900, down 12% quarter-on-quarter and 1% on a year ago.
  • Gross buy-to-let totalled £8.4bn, down 6% on Q1 but up 5% on Q2 2016. This equated to 55,400 loans, down 6% on the previous quarter but up 5% year-on-year.

Paul Smee, Head of Mortgages at UK Finance, commented:

June's figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers. Buy-to-let activity remains subdued compared to its 2015 peak but consistent month-to-month since stamp duty changes in April 2016. But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017. A slightly lop-sided market could well show some growth in house purchase lending but alongside reduced remortgage and buy-to-let activity.

Home-owner house purchase and remortgage lending in June 2017

On a seasonally adjusted basis, lending to first-time buyers and home movers remained relatively unchanged month-on-month, but there were year-on-year increases by volume and by value. Buy-to-let and remortgage activity remained relatively unchanged in June from May. (The full seasonally and non-seasonally adjusted data set can be downloaded at the bottom of the page.)

The proportion of household income used to service capital and interest rates continued to be near historic lows in June for both first-time buyers and home movers at 17.3% and 17.5% respectively.

Affordability metrics for first-time buyers saw the typical loan size increase from £137,000 in May to £139,000 in June. The average household income increased to £41,000 from £40,500. This meant the income multiple went up from 3.58 to 3.59.

The average amount borrowed by home movers in the UK increased to £180,000 from £177,000 the previous month, while the average home mover household income increased month-on-month from £54,900 to £55,200. The income multiple for the average home mover went up to 3.39 from 3.37.

Chart 1: Number of loans to home-owners, 2007-2017

20170815 June 2017 MLT chart 1

Source: UK Finance Regulated Mortgage Survey 

Buy-to-let lending in June

Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. Buy-to-let house purchase and remortgage activity in June remained consistent to monthly levels seen since the change on stamp duty on second properties introduced in April last year.

Chart 2: Number of loans for buy-to-let

20170815 June 2017 MLT chart 2

Source: UK Finance 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 2016

34,100

33,600

6,100

32,300

12,200

May 2017

29,400

29,400

6,100

32,800

12,700

June 2017

36,000

36,500

6,700

34,300

12,600

1 month change

+22.4%

+24.1%

+9.8%

+4.6%

-0.8%

12 month change

+5.6%

+8.6%

+9.8%

+6.2%

+3.3%


Table 2: Number of loans for house purchase and remortgage in Q2

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q2 2016

86,100

81,500

14,700

97,600

35,900

Q1 2017

79,300

79,100

18,400

110,100

38,200

Q2 2017

91,400

92,200

18,100

96,900

36,100

1 quarter change

+15.3%

+16.6%

-1.6%

-12.0%

-5.5%

1 year change

+6.2%

+13.1%

+23.1%

-0.7%

+0.6%


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 2016

5,400

6,800

900

5,600

2,000

May 2017

4,700

6,200

900

5,700

1,900

June 2017

5,900

7,800

900

6,000

2,000

1 month change

+25.5%

+25.8%

0.0%

+5.3%

+5.3%

12 month change

+9.3%

+14.7%

0.0%

+7.1%

0.0%


Table 4: Value of loans for house purchase and remortgage in Q2

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q2 2016

13,400

16,200

2,100

16,700

5,800

Q1 2017

12,500

16,500

2,600

18,900

6,100

Q2 2017

14,800

19,600

2,600

16,900

5,600

1 quarter change

+18.4%

+18.8%

0.0%

-10.6%

-8.2%

1 year change

+10.4%

+21.0%

+23.8%

+1.2%

-3.4%


Affordability infographics

20170815 June 2017 first time buyers infographic v1

20170815 June 2017 MLT Home mover infographic v1

Notes to editors

1. UK Finance is a new trade association which was formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together 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.

2. Mortgage lending figures for July will be released on Tuesday 12 September 2017.

Contact us

Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924

Bernard Clarke

020 7438 8923