The dip in mortgage lending in February was primarily due to the expected seasonal factors associated with this time of year but year-on-year growth comparisons remain strong.
The total number of loans advanced to home-owners for house purchase remained practically unchanged in February compared to January but increased 33% compared to February 2013.
First-time buyers took out 22,200 loans in total in February, a modest rise in volume compared to January but up 41% compared to February 2013. Home movers took out a total of 26,200 loans for house purchase in February, down 2.2% compared to January but up 27% compared to February last year.
The total number of loans taken out by home-owners for remortgage fell in February by 15% compared to January but still had a strong year-on-year increase up by 17% compared to February 2013.
Gross buy-to-let loans advanced decreased in February to 14,300 compared to 15,700 in January but there was a strong year-on-year increase in volume of 46% compared to February 2013.
The Bank of England reported earlier this month gross UK mortgage lending was £14.8 billion in February, a 8% fall compared to January, but 40% higher in value than February last year.
Despite the predicted seasonal dip around this time of year, lending for home-owner house purchase in February remained steady. The total number of loans advanced to home-owners for house purchase was 48,400 loans, only a slight difference to the 48,500 loans in January, but an increase in volume of 33% compared to February last year. Overall, the value of the loans advanced in February totalled £7.8bn, which was only slightly lower than £7.9bn in January but a substantial increase of 47% compared to February 2013.
The number of loans advanced to home movers for house purchase totalled 26,200 in February, down 2.2% in volume compared to January but up by 27% compared to February 2013. Home mover loans totalled £4.7bn in value in February, which was a month-on-month decrease of 4% from January but up 38% compared to February 2013.
Home-owner remortgage activity showed the biggest seasonal dip of all the lending types decreasing in February to 23,800 loans, down in volume 15% compared to January but up from February 2013 by 17%. These loans totalled £3.5bn in value, which was down 17% on January but up 30% compared to February 2013.
Paul Smee, director general of the CML, commented:
“We would expect a seasonal lending dip around this time of year. However, lending to both first-time buyers and home movers bucks this trend, continuing to show momentum. The substantial year-on-year growth shows how far the market has moved since the flat period experienced up until around a year ago."
"The new regulation of mortgages that takes effect at the end of April is a significant change. The industry is ready for the transition, although there is clearly potential for lending to be distorted temporarily over the coming months, given the magnitude of the changes and the importance of complying with regulatory expectations. Overall, we expect to see continuing growth in mortgage borrowing ahead, within responsible lending parameters, as the pent-up demand of the recession years finds an outlet in a stronger market.”
