These loans totalled £3.6bn in value, which was unchanged from the previous month but up 16% compared to March 2013.
Remortgage activity in the first quarter of 2014 showed the expected seasonal dip compared to the fourth quarter of 2013 dropping 6% to 78,200 loans in total. This, however, was an increase of 14% compared to the first quarter of 2013. The value of these loans totalled £11.5bn, which again decreased by 7% compared to the previous quarter but was up 28% compared to quarter one 2013.
Paul Smee, director general of the CML, commented:
“All types of lending show positive year-on-year growth but the rate of increase is not as frenetic as at the end of 2013. Buy-to-let lending continues to recover and regain market share.
"The FCA's new regulation of mortgages has now been introduced, but it will still be some time until we can assess its effect on the market. The industry was ready for the transition, and already actively implementing many of the changes prior to April. We do not anticipate prolonged disruption to the market as a consequence. But we still see affordability constraints as an important factor in determining the level of demand for mortgages which we see over the next year.”
Andy Knee, Chief Executive of LMS, comments:
“The latest CML figures show that even before its introduction, MMR already began making changes to the market. Despite year-on-year growth, both home-owner house purchase and remortgaging loans have seen quarterly falls compared to the last quarter of 2013. Remortgaging was the first to feel the impact of MMR as lenders slowed lending in anticipation of the sweeping reforms, while a hiking of mortgage rates also discouraged many borrowers to swap deals.
“Responsible lending and affordability is clearly – and quite correctly - the phrase on everyone’s lips, but this must not come at the cost of aspiring homeowners, a group that already face steep obstacles to make the leap onto the ladder. But through effective use of MMR we can ensure the market continues to thrive, especially in the context of a stronger economic outlook with higher employment figures and lower inflation.
“A transitional period is only natural to get systems and processes geared up. Later in the year it is expected that the mortgage market will pick up, securing long and sustainable growth.”
