House purchase lending down 12% in November
New CML data on the characteristics of lending in November 2014 show a decline in lending trends to first-time buyers, home movers and remortgaging, from the heights of November 2013; but a year-on-year increase in buy-to-let lending.
New CML data on the characteristics of lending in November 2014 show a decline in lending trends to first-time buyers, home movers and remortgaging, from the heights of November 2013; but a year-on-year increase in buy-to-let lending.
First-time buyers saw a month-on-month lending decline, with 25,900 first-time buyer loans in November - down 11% on October, and 3% down on November 2013. By value, there was £3.8 billion advanced to first-time buyers in November - 12% down on October but 6% up on November last year.
Lending to home movers also declined month-on-month. The number of loans advanced to movers was 29,700, a 13% fall on the previous month and down 10% on November last year. By value, lending to movers totalled £5.4 billion, down 14% on October and 5% on November last year.
Remortgage lending activity saw a decline month-on-month in November, with the number of remortgage loans totalling 24,000. This was 8% down on October and 16% down on November last year. The value of these loans (£3.6 billion) was down 10% on the previous month and down 14% on November last year.
There were 17,700 buy-to-let loans in November, representing lending of £2.4bn. This was a decrease on the previous month with loan volumes down 10% and the value of these loans down 11%. Compared to November 2013, the number of loans increased 9% and the value of these loans went up 14%.
As previously reported, gross mortgage lending reached £16.5 billion in November. This is 11% lower than October (£18.6 billion), and 3% lower than November last year.
Lending for home-owner house purchase
House purchase lending to home-buyers decreased month-on-month in November totalling 55,600 loans. This was down 12% compared to October with the value of these loans totalling £9.2bn, a fall of 13%. Compared to November 2013, the number of loans decreased by 7% and the value of lending by 1%.
Lending to first-time buyers
First-time buyer affordability changed fractionally, with first-time buyers typically borrowing 3.37 times their gross income, compared to 3.39 in October. The typical loan size for first-time buyers fell for the second consecutive time month-on-month to £124,822 in November, down from £125,800 in October. The typical gross income of a first-time buyer household changed slightly to £38,476 in November from £38,801 in October.
First-time buyers in November paid 19.3% of gross income towards covering capital and interest payments, little changed from 19.5% in October but still significantly less than the recent peak of 24.8% in December 2007.
Lending to home movers
Home movers affordability remained consistent month-on-month, with borrowers typically being advanced a mortgage loan 3.01 times their gross income in November, only a sight change compared to 3.00 in October. The typical loan size for home movers was £152,995 in November, practically unchanged from £153,000 in October. The typical gross household income of a home mover was £53,368 in November, which again was very similar to £53,515 in October.
Home movers' payment burden remained relatively low in November at 18.4% of gross income being spent to cover monthly capital and interest payments, down from 18.5% in October, and well below the recent peak of 23.8% in December 2007.
Lending to home owners for remortgage
Remortgage lending activity saw a dip month-on-month in November, with the number of remortgage loans totalling 24,000. This was 8% down on October and 16% down on November last year. The value of these loans (£3.6 billion) was down 10% on the previous month and down 14% on November last year.
Buy-to-let lending
There were 17,700 buy-to-let loans in November, representing lending of £2.4bn. The volume of loans decreased 10% and value of these loans was down 11% compared to October. In contrast, compared to November 2013, there was a 9% increase by volume and 14% by value.
Within the overall total of buy-to-let loans in November, 8,900 were advanced for house purchase and 8,600 for remortgage. The number of buy-to-let house purchase loans decreased by 12% compared to October but up 6% compared to November last year. This totalled £1.1bn in value, down 8% on October but up 10% on November last year.
The number of remortgage loans decreased in November, down 8% on October but up 12% compared to November last year. These loans had a total value of £1.3bn, down 7% on October but up 18% on November last year.
Paul Smee, director general of the CML, commented: “The easing back of activity is not completely unexpected as there is usually a seasonal lending dip in the winter months and the major industry changes and more restrained market sentiment have inevitably caused month-to-month fluctuations over the last twelve months. Our forecasts are for gross lending to continue to grow over the next two years and this reflects our belief that there are more stable conditions in the market than a year ago.”