CML: Q4 lending sees 'mixed picture'

The CML says its December data reveals a 'mixed picture on lending', but the value of lending grew across all lending types on an annual basis.

Related topics:  Finance News
Rozi Jones
16th February 2016
CML

First-time buyers saw a positive December, borrowing £4.5bn - up 7% on November and 18% on December last year. This totalled 29,300 loans, up 6% month-on-month and 11% year-on-year.

Home movers borrowed £6.6bn, up 2% on November and 20% year-on-year. However remortgage activity fell 16% by volume and 16% by value compared to November, while gross buy-to-let saw month-on-month decreases - down 3% by volume and 3% by value. However both sectors saw continued growth on an annual basis.

For Q4, first-time buyer lending rose in volume by 3% on Q3 and 14% on the fourth quarter 2014, and in value by 3% quarter-on-quarter and 8% year-on-year.

Home movers took out 101,900 loans, down 1% quarter-on-quarter but up 9% compared to the fourth quarter 2014.

Remortgage lending rose 4% by volume and 6% by value compared to Q3, and 21% by volume and 35% by value annually.

Gross buy-to-let saw a slight quarter-to-quarter decrease, down 1% by volume and 1% by value.   

For 2015 as a whole, first-time buyers, home movers and buy-to-let all saw their highest lending figures since 2007.

First-time buyers borrowed £46.7bn - a 4% rise, while buy-to-let lending rose by 28% by volume and 39% by value.

Home movers took out 365,800 loans, down 0.2% on 2014, but the amount borrowed totalled £72.1bn, up 7% on 2014.

Remortgage activity was up 11% by volume and 20% by value compared to 2014. The value of remortgage lending was at its highest since 2008.

Paul Smee, director general of the CML, commented:

"Improving economic conditions, boosted by government schemes like Help to Buy, saw the highest quarterly number of loans to purchase a home for eight years. The market has seen a gradual upward trajectory over the past few years, rather than rapid growth, and we'd expect this trend to continue with gross lending steadily increasing over the next two years." 

Jeremy Duncombe, Director, Legal & General Mortgage Club, said:

“Lending saw significant growth in 2015 as increasing house prices necessitated the uptake of larger loans to secure properties. Buy-to-Let and remortgage business were significant contributors to this annual growth, as more people sought to make the most of their money. Remortgaging offers borrowers the chance to save money by moving to a more economical rate, whilst the attractive returns offered by Buy-to-Let opened up more people to the prospect of becoming a landlord. With the new Stamp Duty changes now firmly on the horizon, Buy-to-Let lending is likely to spike due to a surge in demand in the first few months of 2016."

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