CML: January sees home lending lull

The Council of Mortgage Lenders today released new data on the characteristics of UK mortgage lending in January 2015, broken down to show first-time buyer, home mover, remortgage and buy-to-let lending.

Related topics:  Mortgages
Amy Loddington
17th March 2015
housing market house down decline drop decrease

As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014.

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.

Home mover lending saw the second highest lending level for the month of January since 2008, behind only last year's volume and value. However, this is the lowest monthly lending level of home mover loan volumes in the UK since March 2013 and in value the lowest level since April 2013.

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.

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."

As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014.

Richard Pike, Phoebus Software sales and marketing director, said:

“The CML’s latest figures on the characteristics of UK lending in January have echoed the overall picture reported in February and by the Bank of England earlier this month.  However, one positive is the increase in remortgaging.  After months bubbling along with little increase or decrease this is an encouraging change.  The market has settled into the MMR regime and we are seeing the intermediated sector increase, with more lenders working with intermediaries.  These latest figures are perhaps evidence that these intermediaries are working with existing clients to get them a better deal, while rates remain low.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:

"January saw a bigger dip in lending compared with December than usual, which may partly be down to the flurry of activity at the end of last year to beat the stamp duty changes. Tougher rules introduced by the mortgage market review mean affordability is an issue for many borrowers: while more lenders may be offering higher loan-to-values, actually getting a big-enough mortgage can be more of a challenge, particularly in London and the south-east."

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