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Home buyers up 27% in March compared to February but down 12% on last year

Published: 17 May 2017

On a non-seasonally adjusted basis, lending in March:

  • Home buyers borrowed £11.2bn, up 24% on February but down 19% on March 2016. This came to 61,700 loans, up 27% on February but down 12% on March 2016.
  • First-time buyers borrowed £4.9bn for home-owner house purchase, up 29% on February and 9% on March 2016. They took out 31,500 loans, up 30% month-on-month and 12% year-on-year. 
  • Home movers borrowed £6.2bn, up 19% on February but down 33% year-on-year. This equated to 30,200 loans, up 24% month-on-month but down 28% compared to March 2016.  
  • Home-owner remortgage activity was up 13% by value and 14% by volume on February. Compared to March 2016, remortgage lending was up 22% by value and 24% by volume. 
  • Gross buy-to-let saw month-on-month increases, up 4% by value and 8% by volume. Compared to March 2016, a month which had a surge of activity ahead of the stamp duty reform introduced in April 2016, as expected the number of loans decreased 58% and the amount borrowed decreased by 60%.    

On a non-seasonally adjusted basis, lending in the first quarter:

  • Home buyers borrowed £28.6bn, down 13% on the fourth quarter 2016 and 7% on the first quarter 2016. This came to 156,000 loans, down 13% on the previous quarter and 5% on the same quarter last year.
  • First-time buyers borrowed £12.3bn for home-owner house purchase, down 13% on the fourth quarter 2016 but up 10% on the first quarter 2016. They took out 78,300 loans, down 13% quarter-on-quarter but up 10% year-on-year. 
  • Home movers borrowed £16.2bn, down 12% on the previous quarter and 18% on the same quarter last year. This equated to 77,600 loans, down 14% quarter-on-quarter and 16% compared to the first quarter 2016.  
  • Home-owner remortgage activity was up 12% by value and 11% by volume on the previous quarter. Compared to the first quarter 2016, remortgage lending was up 18% by value and by volume. 
  • Gross buy-to-let saw quarter-on-quarter decreases, down 2% by value and 1% by volume. Compared to the first quarter 2016, the number of loans decreased 39% and the amount borrowed decreased by 40%.  

Looking on a seasonally adjusted basis, first-time buyer, home mover, buy-to-let and remortgage activity remained relatively unchanged by volume and by value month-on-month. Compared to March 2016, all loan types had similar changes to the non-seasonally adjusted figures. Full seasonally and non-seasonally adjusted data can be downloaded at the bottom of the page.

Paul Smee, director general of the CML, commented:

Comparing this March to last year is misleading because of the peak in activity before the stamp duty changes last Spring. Overall, lending trends have remained reasonably consistent. The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected. As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available.

Home-owner house purchase and remortgage lending

First-time buyer and home mover activity came out of the winter seasonal dip this month with the highest monthly volumes of the year so far. While home movers decreased year-on-year compared to March 2016, more loans were advanced to first-time buyers this year than in any month of March period since 2007.

On a quarterly basis, house purchase activity was at its weakest for two years since the first quarter of 2015. By contrast, the number of remortgage loans advanced to borrowers was at its highest since the first quarter of 2009.

The proportion of household income used to service capital and interest rates continued to be near historic lows in March for both first-time buyers and home movers at 17.2% and 17.5% respectively.

Affordability metrics for first-time buyers saw the typical loan size increase slightly from £132,200 in February to £133,500 in March. The average household income remained the same month-on-month at £40,000. This meant the income multiple went from 3.54 to 3.53.

The average amount borrowed by home movers in the UK decreased to £172,000 from £176,000 the previous month, while the average home mover household income decreased slightly month-on-month from £55,000 to £54,100. The income multiple for the average home mover was unchanged at 3.34.

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

20170515 March 2017 MLT chart one

Source: CML Regulated Mortgage Survey 

Buy-to-let lending in March

Buy-to-let activity was driven by remortgage lending which accounted for nearly two thirds of total lending. The number of loans for buy-to-let house purchase advanced in March remained low compared to activity seen before the change on stamp duty on second properties introduced in April last year. 

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

20170515 March 2017 MLT chart two

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

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

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

March 2016

28,100

41,900 29,100 28,700

16,100

February 2017

24,200 24,400 5,700 31,100 11,700

March 2017

31,500 30,200 6,500 35,500

12,300

1 month change

+30.2% +23.8% +14.0% +14.1% +5.1%

12 month change

+12.1% -27.9% -77.7% +23.7% -23.6%

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

 

House purchase (£m)

Remortgage (£m)

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

March 2016

4,500 9,300 4,400 4,900 2,700

February 2017

3,800 5,200 800 5,300 1,900

March 2017

4,900 6,200 900 6,000 1,900

1 month change

+28.9% +19.2%  +12.5% +13.2% 0.0%

12 month change

+8.9% -33.3% -79.5% +22.4% -29.6%

Table 3 - Number of loans for house purchase and remortgage (Q1 2017)

 

House purchase

Remortgage

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q1 2016

71,100

92,500

49,100

90,400

43,000

Q4 2016

89,600

90,100

19,300

96,400

37,300

Q1 2017

78,300

77,600

18,100

106,700

38,000

1Q change

-12.6%

-13.9%

-6.2%

+10.7%

+1.9%

4Q change

+10.1%

-16.1%

-63.1%

+18.0%

-11.6%

Table 4 - Value of loans for house purchase and remortgage (Q1 2017)

 

House purchase

Remortgage

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

Q1 2016

11,200

19,700

7,300

15,500

7,200

Q4 2016

14,200

18,500

2,700

16,400

6,000

Q1 2017

12,300

16,200

2,500

18,300

6,000

1Q change

-13.4%

-12.4%

-7.4%

+11.6%

0.0%

4Q change

+9.8%

-17.8%

-65.8%

+18.1%

-16.7%

20170515 March 2017 MLT FTB infographic

20170515 March 2017 MLT home movers 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 April 2017 data will be released on Tuesday 13 June 2017.

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Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924

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