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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Mortgage lending strengthened in August

Published: 12 October 2017

UK Finance data shows that lending for house purchase was higher in August 2017 than in both the preceding month and a year earlier:

  • First-time buyers borrowed £5.7 billion, 16 per cent more than in July and 12 per cent more than in August 2016. They took out 34,400 mortgages, 14 per cent up on the preceding month and nine per cent more year-on-year.
  • Home movers borrowed £8.4 billion, 18 per cent more than in July and 20 per cent more than in August last year. This equated to 38,500 loans, up 17 per cent on July and 13 per cent on August 2016.
  • Remortgaging by home owners totalled £6.4 billion, four per cent less than in July but eight per cent more than in August 2016. The number of people remortgaging totalled 36,700, down one per cent on July but five per cent higher than a year ago.
  • Buy-to-let lending totalled £3.1 billion, down three per cent on July 2017 and the same as in August last year. This equated to 20,400 mortgages, the same as in July but four per cent more than in August last year.

     

Commenting on the data, UK Finance’s Head of Mortgages Policy June Deasy said: 

Activity picked up in August, and recent resilience ensured that borrowing by home movers was at its highest since March 2016, when transactions were boosted by an imminent increase in stamp duty. Over the last 12 months, the number of people remortaging has been higher than in any period since late 2009. With mortgage rates close to historic lows and the likelihood of a rise in official rates moving closer, the popularity of remortgaging looks set to continue.

Home owner house purchase and remortgaging in August 2017

On a seasonally adjusted basis, borrowing by first-time buyers and movers increased by both value and volume. There was a decline in both the number of people remortgaging and the value of lending. The value of buy-to-let lending was unchanged but there was a small decrease in the number of buy-to-let borrowers remortgaging. (The full seasonally and non-seasonally adjusted data can be downloaded at the bottom of the page.)

The proportion of household income taken up by mortgage payments edged up for first-time buyers (17.5 per cent) but was unchanged for movers (17.6 per cent). Overall, it remains low by historical standards.

The average amount borrowed by a first-time buyer increased from £138,999 in July 2017 to £140,035. There was a smaller proportionate increase in the average first-time buyer household income, and the average income multiple increased from 3.60 to 3.63. The average amount borrowed by movers increased from £180,000 to £182,750, and their average income multiple increased from 3.38 to 3.40.

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

chart 1 aug 17

Source: UK Finance regulated mortgage survey

Buy-to-let lending in August

Remortgaging accounted for more than two-thirds (68 per cent) of buy-to-let lending in August. Buy-to-let remortgaging was five per cent lower than in July, but borrowing for house purchase increased by 11 per cent. Overall, however, borrowing for house purchase by buy-to-let landlords remains at a lower level than before the introduction of the higher stamp duty rate in the spring of 2016.

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

chart 2 aug 17

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

Table 1 -  Number of loans for house purchase and remortgage

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

August 2016

31,600

34,100

6,500

35,000

12,900

July 2017

30,300

32,900

6,400

37,100

13,700

August 2017

34,400

38,500

6,800

36,700

13,100

1-month change

13.5%

17.0%

6.3%

-1.1%

-4.4%

12-month change

8.9%

12.9%

4.6%

4.9%

1.6%

Table 2 - Value of loans for house purchase and remortgage

 

House purchase

Remortgage

 

FTBs

Movers

Buy-to-let

Home owners

Buy-to-let

August 2016

5,100

7,000

1,000

5,900

2,100

July 2017

4,900

7,100

900

6,700

2,200

August 2017

5,700

8,400

1,000

6,400

2,100

1-month change

16.3%

18.3%

11.1%

-4.5%

-4.5%

12-month change

11.8%

20.0%

0.0%

8.5%

0.0%

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

August 2016

136,500

40,996

85.0%

3.56

9.3%

18.0%

July 2017

138,999

40,995

85.0%

3.60

8.3%

17.4%

August 2017

140,035

41,254

85.0%

3.63

8.2%

17.5%

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

August 2016

175,000

55,457

71.2%

3.27

7.1%

17.9%

July 2017

180,000

55,825

72.2%

3.38

6.5%

17.6%

August 2017

182,750

56,087

72.0%

3.40

6.4%

17.6%

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

August 2016

175,000

55,457

71.2%

3.27

7.1%

17.9%

July 2017

180,000

55,825

72.2%

3.38

6.5%

17.6%

August 2017

182,750

56,087

72.0%

3.40

6.4%

17.6%

 

Affordability infographics

  UKF_FirsttimebuyeraffordabilityintheUK_Aug017

 UKF_Home movers affordability in the UK_Aug2017

 

 

 

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 September 2017 will be released on Tuesday 14 November 2017.

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