In September, the number of loans advanced to movers was 31,700, a 10% fall on the previous month but up 11% on September last year. By value, lending to movers totalled £6 billion, 12% down on August but up 18% on September last year.
Home movers typically borrowed 3.06 times their gross income in September, compared to 3.05 in August. The typical loan size for home movers was £154,800 in September, down from £155,995 in August. The typical gross household income of a home mover was £53,291 in September compared to £54,150 in August.
Home movers' payment burden remained relatively low in September at 18.8% of gross income being spent to cover monthly capital and interest payments, unchanged from August, but well below the recent peak of 23.8% in December 2007.
At 103,600 loans, there were 12% more home-mover loans in the third quarter than the second, and 10% more than in Q3 2014. On a quarterly basis, the value of home-mover lending was £19.8 billion, up 16% on the second quarter and 19% up on the third quarter 2013.
Home mover characteristics changed marginally within this period. Home movers borrowed on average £155,241, up from £150,995 in the second quarter of the year. They typically borrowed 3.05 times their income, down slightly from 3.08 in the second quarter of 2014. The average household income of home movers increased to £53,854 in the period, up from £51,265 in the second quarter of 2014.
Paul Smee, director general of the CML, commented:
“We are approaching the end of twelve months of change, transition and growth. This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges. The lending market is healthier than it was a year ago, and set to remain so. Remortgaging has returned as a driver of lending volume in the buy-to-let sector. But any fears of over-heating in the housing market are now dissipating as house purchase lending activity seems to be softening.”
Alan Cleary, Managing Director of Precise Mortgages said:
“Over the past few weeks we’ve seen further evidence that that the Mortgage Market Review has successfully applied the brakes to the housing market. The figures released today from the CML reinforce these signs with gross mortgage lending down 10% from August.
“Many could see the slowing of the mortgage market as a welcome protection against a property bubble. But it is important that the industry safeguards access for the long-term. We know first-hand that freelancers and self-employed people are groups in particular that often struggle to gain support from mainstream lenders. Any further decline in the market as a whole could waver their interest further. That’s why we need to be certain that as an industry we are doing everything we can to support credit-worthy individuals on the property ladder.”
