Lending in January:
- First-time buyers saw a drop in lending compared to December and the same month in 2014. There were 19,000 loans advanced to first-time buyers January – down 27% on December and 14% compared to January 2014. These loans by value were £2.8 billion, which was down 26% on December and 10% down on January last year.
- Home movers were advanced 22,400 loans, a decline of 24% compared to December and 17% down year-on-year. These loans totalled in value £4.2bn – 24% down on December and 14% down compared to January 2014.
- Remortgage lending increased month-on-month with 25,600 loans advanced – up 15% on December but 12% down on January 2014. The value of these loans (£4.1 billion) also increased month-on-month by 21% but was down 5% year-on-year compared to January 2014.
- There were 18,200 buy-to-let loans in January – up 6% on the previous month and up 12% on the same period in 2014. These loans came to £2.5bn in value, unchanged compared to December but up 14% on January 2014.
Paul Smee, director general of the CML, commented:
“The traditional beginning of year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014. Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months.
“Increases month-on-month in remortgaging, both for home owners and in the buy-to-let market, are welcome given the recent static nature of remortgage activity. Interest rates are looking unlikely to go up in the very near future and the greater availability of good mortgage rates has probably motivated people to look at a change.”
Buy-to-let lending trends in December
Gross buy-to-let advances in January were boosted by a significant increase in remortgaging, despite a slowdown in house purchase. There were 18,200 loans, up 5% compared to December and 12% compared to January 2014. These loans represented £2.5bn of lending – unchanged from December but 14% up compared to January 2014.
However, the number of buy-to-let loans for house purchase was 7,600 in January, down 10% on December and 6% on January 2014. These loans represented a value of £1bn, a decrease of 7% month-on-month but up 5% year-on-year compared to January 2014.
The number of buy-to-let loans remortgages rose 21% in January from December to 10,400, an increase of 28% on January 2014. The value of these loans totalled £1.5bn, up 11% month-on-month and 29% compared with last January.
Number of buy-to-let loans advanced for house purchase and remortgage per month
Analysis of first-time buyers lending trends
Lending to first-time buyers in January was at its lowest monthly level in 21 months, by both volume and value. However, it was the second highest January lending level since 2007, behind only last Januarys levels in both volume and value.
Analysis of remortgage lending
Unlike home-owner house purchase, remortgage lending increased in January compared to December. However, the number of home-owner remortgage loans remained modest, and was lower than last January. The value of these loans totalled £4.1bn, the second highest value for the month of January since 2009, behind only last years January remortgage value.