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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Remortgaging boost continued in October

Published: 12 December 2017

Non-seasonally adjusted data released by UK Finance today shows that the number and value of loans for remortgaging and for house purchases rose in October in comparison with a month ago and with the same period in 2016.

Capital and interest payments for new loans remain near record lows for both home movers and first-time buyers, reflecting a competitive mortgage marketplace.

Commenting on the data, UK Finance’s head of mortgage policy June Deasy said:

“Over the last year, the number of loans for remortgaging have been at record levels; this trend looks set to continue further as we head towards the end of 2017 and borrowers seek to take advantage of low interest rates.

“Mortgage repayments as a proportion of income still remain at or close to their historic low point, and despite the recent base rate rise we can expect monthly mortgage payments to remain affordable for the vast majority of borrowers.”

First-time buyers

  • First-time buyers borrowed £5.1 billion, up two per cent on the previous month and 13.3 per cent higher than in October 2016. There were 31,700 loans awarded, up 3.6 per cent on October and up 10.5 per cent on a year ago
  • Combined capital and interest payments as a percentage of income remained stable at 17.2 per cent, down 0.1 percentage points on September 2017 and down 0.4 percentage points compared with a year ago. The loan to value ratio rose slightly, with an increase of 0.6 percentage points on September.

Home movers

  • Home movers borrowed £7 billion, up 2.9 per cent on September and 18.6 per cent higher year-on-year There were 33,300 home movers, and increase of five per cent on September and a substantial 15.6 per cent on October 2016.
  • Average combined capital and interest payments also remained stable at 17.5 per cent of income, unchanged on the same month last year. The loan to income ratio rose slightly to 3.41, up from 3.38 a month earlier.

Remortgaging & buy-to-let

  • Home-owner remortgage activity totalled £7.3 billion, up 15.9 per cent on September and 17.7 per cent higher than a year ago.   That corresponded to 41,100 remortgages, an increase of 16.1 per cent on September and a twelve-month change of 16.4 per cent.
  • Buy-to-let remortgaging totalled £2.4 billion, up 20 per cent on September 2017 and October 2016. Remortgaging now accounts for just over 70 per cent of all buy-to-let lending. There were 14,700 buy-to-let remortgages, up 20.5 per cent on last month – and a 21.5 per cent annual increase.
  • Gross buy-to-let lending for house purchasers totalled £900 million, unchanged on september 2017 and October 2016.  That equated to 6,600 mortgages. 

Table 1 -  Number of loans for house purchase and remortgage

  House purchase Remortgage
FTBs Movers Buy-to-let Home owners Buy-to-let
October 2016

28,700

28,800

6,200

35,300

12,100

September 2017

30,600

31,700

6,200

35,400

12,200

October 2017

31,700

33,300

6,600

41,100

14,700

1 month change

3.6%

5.0%

6.5%

16.1%

20.5%

12 month change

10.5%

15.6%

6.5%

16.4%

21.5%

Table 2 - Value of loans for house purchase and remortgage (£ million)

  House purchase Remortgage
FTBs Movers Buy-to-let Home owners Buy-to-let
October 2016

4,500

5,900

900

6,200

2,000

September 2017

5,000

6,800

900

6,300

2,000

October 2017

5,100

7,000

900

7,300

2,400

1 month change

2.0%

2.9%

0.0%

15.9%

20.0%

12 month change

13.3%

18.6%

0.0%

17.7%

20.0%

Table 3 - 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

October 2016

133,458

40,077

84.6%

3.56

8.8%

17.6%

September 2017

138,000

40,842

84.1%

3.61

8.0%

17.3%

October 2017

138,750

40,946

84.7%

3.60

8.0%

17.2%

Table 4 - 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

October 2016

171,995

55,000

72.1%

3.26

6.8%

17.6%

September 2017

180,000

55,652

72.4%

3.38

6.3%

17.5%

October 2017

179,494

55,000

72.4%

3.41

6.3%

17.5%

Chart 1: Number of loans to home owners, 2007-17

 

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

Affordability infographics

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.

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