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 advances pick up in the third quarter

Published: 11 November 2015

Lending in September:

  • First-time buyers saw month-on-month and year-on-year increases in activity by volume and by value in September. 
  • Home mover lending by contrast saw a dip in September compared to August, but grew by volume and by value compared to a year ago.
  • Home-owner remortgage activity rebounded after a dip in August to increased levels in September both compared to a month ago and the same time last year. 
  • Buy-to-let saw year-on-year increases by volume and by value in both buy-to-let house purchase and buy-to-let remortgage.    

Lending in the third quarter 2015:

  • First-time buyers increased in number of loans advanced and amount borrowed both in comparison to quarter two and the third quarter last year. 
  • Home mover lending saw a similar trend to first-time buyers but the percentage increases by volume and by value were higher.   
  • Home-owner remortgage activity saw an increase compared to the second quarter of the year, but a more substantial increase compared to the third quarter 2014.  
  • Buy-to-let saw large quarter-on-quarter and year-on-year increases by number of loans and amount borrowed.  

Paul Smee, director general of the CML, commented:

The market was a slow starter this year, but this quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.

Buy-to-let continues its growth this period, but at 18% of new lending in September remains the fourth largest lending type behind first-time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession.

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

Sept 2015 MLT Chart 1
Source: CML Regulated Mortgage Survey (April 2005 onwards), CML Economics    

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

Sept 2015 MLT Chart 2

Source: CML Regulated Mortgage Survey (April 2005 onwards)

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Lending for house purchase and remortgage   

Table 1: September lending for home-owner house purchase and remortgage

  No. of house purchase loans % change by volume Value of house purchase loans, £m % change by value No. of remortgage loans  % change by volume Value of remortgage loans, £m % change by value
Sept-15 62,300   11,200   31,000   5,100  
Aug-15 62,300 No change 11,300 -0.9% 25,800 +20.2% 4,300 +18.6%
Sept -14 57,600 +8.2% 9,800 +14.3% 27,900 +11.1% 4,300 +18.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Table 2: Third quarter lending for home-owner house purchase and remortgage

  No. of house purchase loans % change by volume Value of house purchase loans, £m % change by value No. of remortgage loans  % change by volume Value of remortgage loans, £m % change by value
Q3-15 193,600   34,900   88,000   14,600  
Q2 -15 164,100 +18.0% 28,100 +24.2% 84,400 +4.3% 13,500 +8.1%
Q3-15 183,800 +5.3% 31,600 +10.4% 75,400 +16.7% 11,700 +24.8%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

House purchase lending in the UK in September saw no change by volume of mortgages advanced compared to August, but there was a dip in amount borrowed month-on-month. However, there was an increase in the number of loans for home-owner house purchase compared to September 2014, the fourth month in a row there has been year-on-year increases. The amount borrowed in September also increased year-on-year, the third month in a row this has been the case. 

In the third quarter, house purchase lending grew compared to the second quarter and the third quarter in 2014 by both volume and by value. This was driven by both first-time buyer and home mover activity which both saw quarterly growth.

As previously reported, UK gross lending overall in September totalled £20.1bn, up 3% on August and 13% on September last year. This meant in the third quarter gross lending came to £61.4bn, up 18% on the previous quarter and a 12% rise on the third quarter 2014.  

Overall in the third quarter, the value of home-owner loans for house purchase accounted for 57% of gross lending, while remortgage activity accounted for 24%. Buy-to-let as a proportion of total lending was around 18%.

Table 3: September first-time buyer lending and affordability measures

 

No. of loans

% change by volume

Value of loans £m

% change by value

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

Sept-15

28,600

 

4,300

 

127,800

39,270

82.2%

3.45

9.7%

18.3%

Aug-15

27,500

+4.0%

4,200

+2.4%

129,200

39,572

84.2%

3.45

10.0%

18.5%

Sept-14

26,300

+8.7%

3,900

+10.3%

126,000

38,716

82.9%

3.40

12.0%

19.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Table 4: Third quarter first-time buyer lending and affordability measures

 

No. of loans

% change by volume

Value of loans £m

% change by value

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

Q3-15

86,800

 

13,200

 

128,108

39,373

83.7%

3.44

9.9%

18.4%

Q2-15

76,500

+13.5%

11,300

+16.8%

125,500

38,729

81.8%

3.38

10.2%

18.4%

Q3-14

82,100

+5.7%

12,200

+8.2%

125,900

38,463

83.9%

3.41

12.0%

19.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Competitive mortgage rates mean first-time buyers continue to pay a record low proportion of their monthly household income to service the capital and interest rate payments of their mortgage at 18.3% in September. This is the equal lowest monthly level, with June 2015, since the CML began tracking this metric in 2005.

By quarter, the third quarter also had the lowest percentage of monthly household income for mortgage capital and interest payments at 18.4%, equal with last quarter. This has decreased as a proportion year-on-year as in the third quarter of 2014 it was 19.6%.

Table 5: September home mover lending and affordability measures

 

No. of loans

% change by volume

Value of loans £m

% change by value

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

Sept-15

33,800

  6,800  

167,495

55,000

72.2%

3.16

7.5%

18.1%

Aug-15

34,800

-2.9%

 7,100

-4.2%

169,000

55,941

71.9%

3.14

7.5%

18.1%

Sept-14

31,300

+8.0%

5,900

+15.3%

154,974

53,262

70.4%

3.06

9.1%

18.9%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Table 6: Third quarter home mover lending and affordability measures

 

No. of loans

% change by volume

Value of loans £m

% change by value

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital & interest payment as % of income

Q3-15

106,700

  21,600  

167,400

55,349

72.2%

3.14

7.5%

18.1%

Q2-15

87,500

+21.9%

 16,800

+29.0%

160,995

54,033

73.7%

3.09

7.8%

18.0%

Q3-14

101,500

+5.1%

19,300

+11.9%

155,143

53,831

70.7%

3.05

9.0%

18.8%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Home movers spent 18.1% of their monthly gross household income to pay capital and interest repayments, unchanged from last month but a decrease compared to September 2014.

In the third quarter, home movers spent 18.1% as a proportion of their income to pay capital and interest repayments. This was slightly up from 18.0% in quarter two, but down compared to 18.8% in the third quarter of 2014.

 Chart 3: Number of home-owner remortgages

Sept 2015 MLT Chart 3

Source: CML Regulated Mortgage Survey (April 2005 onwards)

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Remortgage activity saw a rise by volume and by value in September compared to August and September last year. Third quarter remortgage activity also saw increases compared to the second quarter and the same period last year by volume and by value.

Lending for buy-to-let 

Gross buy-to-let lending increased substantially in September and in the third quarter, up by volume and by value in comparison to the previous time period and the same time last year. This increase in activity was driven by both buy-to-let house purchase and buy-to-let remortgage activity, although remortgage levels are showing greater growth.

Buy-to-let lending for house purchase showed stronger year-on-year growth than home-owner loans for house purchase for most of the year, which in part is a market recovery response as buy-to-let lending declined more than home-owner lending during the downturn. While loans to home-owners for house purchase declined by 50% in volume terms from 2007 to 2009, buy-to-let loans for house purchase declined 71% in the same period. Buy-to-let currently in September represents 18% of gross lending. 

Table 7: September buy-to-let lending 

 

Gross lending buy-to-let

Buy-to-let house purchase

Buy-to-let remortgage

 

No. of loans

 % change

Value   of loans (£m)

% change

No. of loans

% change

Value   of loans (£m)

% change

No. of loans

% change

Value   of loans (£m)

% change

Sep-15

24,100

  3,700

 

11,300

 

1,500

 

12,700

 

2,100

 

Aug-15

22,200

+8.6%  3,400

+8.8%

10,500

+7.6%

1,400

+7.1%

11,500

+10.4%

1,900

+10.5% 

Sep-14

17,700

+36.2% 2,500 

+48.0%

8,700

+29.9%

1,100

+36.4%

8,900

+42.7%

1,300

+61.5%

Source: CML Economics

Table 8: Third quarter buy-to-let lending 

 

Gross lending buy-to-let

Buy-to-let house purchase

Buy-to-let remortgage

 

No. of loans

 % change

Value   of loans (£m)

% change

No. of loans

% change

Value   of loans (£m)

% change

No. of loans

% change

Value   of loans (£m)

% change

Q3-15

71,500

  10,900

 

33,600

 

4,500

 

37,400

 

6,200

 

Q2-15

58,000

+23.3%  8,800

+23.9%

28,020

+19.9%

3,810

+18.1%

29,400

+27.2%

4,590

+35.1% 

Q3-14

51,900

+37.8% 7,300 

+49.3%

26,370

+27.4%

3,270

+37.6%

25,150

+48.7%

3,770

+64.5%

Source: CML Economics

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

 Sept 2015 MLT Chart 4

Source: CML Economics

Download the data

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 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. Source: CML Regulated Mortgage Survey for all home-owner mortgage data. 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 October 2015 data will be released on Tuesday 15 December 2015.

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