44,000 loans for house purchase, worth £6.3 billion, were advanced in the month. This was unchanged from October and down 15% by volume and 13% by value from November 2009.
This month sees the launch of a new database for the CML monthly Regulated Mortgage Survey lending figures, and all historic RMS data back to 2005 are now based on this. There have been revisions to all historic data, reflecting improvements in data coverage and quality.
Although most revisions are modest and within expected statistical error margins, care should be taken in comparing these new figures with any published by the CML previously.
Loans for remortgage were down compared to the same period last year (12% by volume and 14% by value) but they showed a small increase from 25,000 (worth £3 billion) in October to 26,000 (worth £3.1 billion) in November.
Bank of England Lending to Individuals figures showed a much larger increase in remortgage activity (from 29,200 loans in October to 36,300 in November). The Bank's figures are based on mortgage approvals, and therefore are a lead indicator of the CML figures which are for mortgage advances.
This indicates there may be a further, more substantial increase in CML remortgage data in the coming months.
First-time buyers took out 16,400 loans (worth £1.9 billion) in November, a 3% increase from October (with the value staying the same) and a 19% decrease (down 17% by value) from the same month last year. Loans to home movers, on the other hand, were down 2% from October with 27,800 loans (worth £4.4 billion), and down 12% compared to November 2009.
Like first-time buyers, the value of lending to home movers was unchanged between October and November.
Lower monthly year-on-year business continues in all areas due to the distortions caused by some households bringing forwards house purchase activity before the close of 2009's stamp duty concession.
Credit criteria remain tight although loan-to-value ratios appear to have eased a little, particularly for first-time buyers. This group borrowed 80% of their home's value in November and is the second month in a row the loan to value has been at 80%. This is the highest the market has seen since November 2008.
Home movers on average borrowed 68% of their home's value for the second month running, up from the low of 67% seen over the summer. For all house purchasers, the proportion of income needed to cover the mortgage interest was at an all-time low of 10.7% in November.
CML director general Michael Coogan said:
"It is encouraging to see credit criteria becoming a little more liberal for first-time buyers. But the funding and capital constraints on lenders will continue to exert a dampening effect on lending, and criteria are unlikely to loosen substantially."
David Whittaker, managing director of Mortgages for Business said:
“Large numbers of buyers hit the market late in 2009 in an attempt to beat the end of the stamp duty holiday but with no incentives to buy at the end of 2010, year-on-year figures were bound to be down. As the New Year tax increases and public spending cuts approached, lenders had plenty to fear about borrowers’ finances. But flat lending levels in November suggest those fears had little impact.
“The mortgage market is unlikely to ease for first-time buyers in 2011 and the private rental sector will again be forced to provide the safety net for many. This offers more opportunities for professional landlords.
"Those able to muster sufficiently large deposits will be able to get their hands on mortgages that offer seriously good value. But investors should see the current situation as an opportunity, not a free-for-all. Anyone interested in investing in property must consider the inevitable interest rate rise and how this will affect their affordability.”
