"Borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007."
The CML says this is due to strong first-time buyer activity which has" consistently matched home mover borrowing over the past six months, a trend not seen in the UK for 20 years".
However due to the seasonal dip in activity, borrowing was relatively low compared to monthly activity the past twelve months.
On a non-seasonally adjusted basis, home buyers borrowed £8.9bn, up 6% on January and 2% on February 2016.
Conversely, homeowner remortgage activity fell by 26% by value and 23% by volume compared to January.
Looking on a seasonally adjusted basis, first-time buyer and home mover activity increased by value month-on-month and year-on-year. Buy-to-let house purchase and remortgage activity remained unchanged by volume and by value month-on-month, but decreased compared to February last year 44% by value and 42% by volume.
Paul Smee, director general of the CML, said: "Seasonal factors traditionally keep the market quieter in winter months, but 2017 began relatively strong on the house purchase side. Borrowers took out more loans to purchase a home in the first two months of 2017 than any year since 2007. This is down to strong first-time buyer activity which has consistently matched home mover borrowing over the past six months, a trend not seen in the UK for 20 years.
"This trend is expected to continue because of the tax changes from April and because lenders are tightening affordability criteria in response to PRA-mandated stress tests."
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented: “Today’s CML figures show that demand for lending, particularly to first time-buyers, remains strong. As the market continues to grow, new borrowers are benefiting from historically low mortgage rates, which are helping an increasing number of people take their first steps onto the property ladder. Despite a monthly fall, remortgaging activity remains up annually as some homeowners use this opportunity to save money and switch to a more competitive deal.
“It is unsurprising that buy-to-let borrowing has weakened year-on-year. With the layering of several control measures and the recent tax changes coming into force, we have seen fewer landlords enter the market, and purchase business has suffered. The shape of the buy to let market is changing, and the outcome of all the changes could impact tenants as rents increase and some stock is sold to counter the increasing burden on landlords.”
