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. Home buyers up 12% in May compared to April

Home buyers up 12% in May compared to April

Published: 12 July 2017

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

  • Home buyers borrowed £10.8bn, up 10% on April and 16% on May 2016. This equated to 58,400 loans, up 12% on April and 10% on May 2016.
  • Within this, first-time buyers borrowed £4.7bn, up 12% both on last month and on May 2016. They took out 29,200 loans, up 13% month-on-month and 8% year-on-year.
  • Home movers borrowed £6.2bn, up 11% on April and 22% year-on-year. This equated to 29,200 loans, up 11% month-on-month and 13% compared to a year ago.
  • Home-owner remortgage activity was up 10% by value and 9% by volume on April. Compared to a year ago, remortgage lending was up 12% by value and 7% by volume.
  • Gross buy-to-let totalled £2.9bn in May, up 16% on April and 12% compared to May last year. This equated to 19,100 loans, a 16% increase on April and 15% on a year ago.

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

The apparent strong growth in mortgage lending in May might flatter to deceive. The relative weakness in lending last May following the stamp duty changes makes comparisons misleading. The seasonally adjusted data shows a less buoyant lending picture, with home buying activity remaining relatively unchanged month-on-month and remortgage lending gradually decreasing each month since January.

In the summer months, we expect home buying activity to continue with an even split between first-time buyers and home movers but in greater numbers than in the winter months; we expect buy-to-let to remain subdued compared to its recent 2015 peak.

Home-owner house purchase and remortgage lending

On a seasonally adjusted basis, lending to first-time buyers and home movers declined by value and volume in May compared to April, but increased compared to a year ago. Buy-to-let and remortgage activity remained relatively unchanged in May from April. [The full seasonally and non-seasonally adjusted data set is attached to this email.]

The proportion of household income used to service capital and interest rates continued to be near historic lows in May 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 £136,300 in April to £137,000 in May. The average household income decreased to £40,500 from £40,700. This meant the income multiple went up from 3.57 to 3.59.

The average amount borrowed by home movers in the UK increased to £177,000 from £176,500 the previous month, while the average home mover household income decreased month-on-month from £55,200 to £54,900. The income multiple for the average home mover went up to 3.38 from 3.35.

Last month, we* [see note to editors no. 2] released a research report evaluating why currently there is a 400,000 deficit in housing transactions in the UK compared to pre-financial crisis levels. The report found that a decrease in home movers was the predominant reason for the dip, and explored the reasons why this was the case. The full report can be read here.

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

20170707 May 2017 MLT chart 1

Source: UK Finance Regulated Mortgage Survey 


Buy-to-let lending in May

Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. The number of loans for buy-to-let house purchase advanced in May 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

20170707 May 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 May

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

May 2016

27,100 25,900 4,400 30,500 11,900

April 2017

25,900 26,300 5,300 29,900 10,800

May 2017

29,200 29,200 6,100 32,600 12,700

1 month change

 +12.7% +11.0% +15.1% +9.0% +17.6%

12 month change

 +7.7% +12.7% +38.6% +6.9% +6.7%

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

 

House purchase (£m)

Remortgage (£m)

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

May 2016

4,200 5,100 600 5,100 1,900

April 2017

4,200 5,600 800 5,200 1,700

May 2017

4,700 6,200 900 5,700 1,900

1 month change

+11.9% +10.7% +12.5% +9.6% +11.8%

12 month change

+11.9% +21.6% +50.0% +11.8% 0.0%


Affordability infographics

UKF Home-movers affordability in the UK May 2017 infographicUKF First-time buyer affordability in the UK infographic

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. The ‘missing movers’ research report released last month analysing low housing sales transactions was commissioned by the Council of Mortgage Lenders, now part of UK Finance. When accrediting the report, please cite UK Finance as the source.

3. Mortgage lending figures for June will be released on Tuesday 15th August.

Contact us

Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924