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Monthly house purchase lending in April down 10% on last year

Published: 16 June 2015

Lending in April:

  • Lending in April was weaker compared to a year ago.
  • First-time buyers saw a decline in lending compared to March and April last year.
  • Home mover lending volumes went up slightly month-on-month but there was a year-on-year decline compared to April last year.
  • Home-owner remortgage activity declined compared to last year. 
  • Buy-to-let continues to grow year-on-year, mainly driven by remortgage activity, although there was month-on-month decline compared to March.

Paul Smee, director general of the CML, commented:

"House purchase lending in April was relatively subdued compared to last year, but similar to activity in March. The economy is recovering, with employment up, earnings growing, and competitive mortgage rates, so we expect activity to continue building as the year progresses.

Buy-to-let is showing stronger growth than home-owner lending, buoyed significantly by remortgaging, which continues to remain more subdued in the home-owner market. 

As previously reported, gross lending in April was £15.8bn, down from £16.1bn in March and £16.8bn in April last year. 

Chart 1: Loans to home-owners and for buy-to-let by value

 Chart 1: Loans to home-owners and for buy-to-let by value

Source: CML Regulated Mortgage Survey (April 2005 onwards), CML Economics

Download data            

Chart 2: Number of loans for house purchase and proportion of FTBs and home-movers

Chart 2: Number of loans for house purchase and proportion of FTBs and home-movers

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

Lending for house purchase and remortgage   

The number of loans for house purchase remained steady in April compared to March, but was down compared to a year ago.

On an annual basis, there was a fall across both first-time buyer numbers and home movers. On a monthly basis, the number of first-time buyers fell but the number of home-movers rose slightly.

Growth rate shows activity across the three categories - first-time buyers, home movers and remortgage - is down compared to April last year. The 12 month rolling sum of the number of first-time buyers has been above 300,000 since June 2014, though it has been gradually falling since October.

Table 1 - First-time buyer affordability measures

 

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Apr-15

125,545

39,000

82.1%

3.37

10.3%

18.5%

Mar-15

123,412

38,505

80.8%

3.36

10.6%

18.8%

Apr-14

120,000

36,535

84.0%

3.44

11.6%

19.5%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

First-time buyer loan sizes have increased since a year ago, though their income has grown faster in proportion relative to loan sizes which has meant a fall in the typical loan-to-income ratio. Loan-to-value ratios have also fallen compared to a year ago. 

Competitive mortgage rates mean first-time buyers are paying less to service their mortgage than any time since we began tracking this in 2005.

Table 2 - Home-mover affordability measures

 

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Apr-15

158,477

54,405

73.5%

3.01

7.7%

17.8%

Mar-15

160,747

54,131

73.0%

3.07

8.1%

18.3%

Apr-14

150,000

51,134

72.4%

3.07

8.8%

18.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

The average home mover loan size decreased in April compared to March, but increased compared to the same period last year. Average income increased in April, meaning loan-to-income decreased both month-on-month and year-on-year.

Chart 3: Number of home-owner remortgages

Chart 3: Number of remortgages

Source: CML Regulated Mortgage Survey (April 2005 onwards)

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Remortgage activity among home-owners was down on the month and on the year. It has remained relatively subdued since around 2009.

Lending for buy-to-let

Lending for buy-to-let in April saw a decline compared to March, but there was substantial growth compared to levels in April last year. This was largely due to the increased levels of remortgage activity in the buy-to-let sector seen since the beginning of the year.

The composition of lending for buy-to-let is different compared to that of home-owner lending. While over the past year about 30% of lending to home-owners was for remortgage, in the buy-to-let market 52% of lending was for remortgage.

Chart 4: Number of buy-to-let loans for house purchase and remortgage 

Chart 4: Number of buy-to-let loans for house purchase and remortgage

Source: CML Economics

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Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey for all home-owner mortgage data. Buy-to-let data is sourced from a sample of CML members and has been grossed to estimate the industry total. The CML began collecting monthly data in January 2013 and will from now on report monthly buy-to-let data in this press releases, alongside our home owner house purchase 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 May 2015 data will be released on Tuesday 14 July 2015.

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