"Last year saw a slight fall in levels of mortgage activity for home purchases, largely driven by increasing affordability pressures."
Its figures show that throughout the year, the UK saw a modest decline in the number of new loans in both the residential and buy-to-let purchase markets.
First-time buyer numbers saw a modest decline of 0.6% for the year as a whole, showing declines in all but two of the English regions (Yorkshire and Humberside and the West Midlands).
The only part of the UK showing material growth in first-time buyer activity last year was Northern Ireland, where Help-to-Buy does not exist but borrowers are taking advantage of "comparatively forgiving affordability metrics", UK Finance says.
The typical first-time buyer in Northern Ireland borrowed just over three times income in Q4 2019, compared to over three and a half times across the wider UK.
Despite the falls in gross mortgage lending, UK Finance noted that price increases have more than offset these declines, resulting in a continuing positive cash advance increase in gross mortgage lending, a trend that has been consistent since 2011.
Eric Leenders, managing director of personal finance at UK Finance, said: “Last year saw a slight fall in levels of mortgage activity for home purchases, largely driven by increasing affordability pressures. Meanwhile, the remortgage market remains competitive, although the shrinking number of customers coming to the end of their fixed rate deals will start to impact volumes in this segment."
John Phillips, national operations director at Just Mortgages, commented: “The figures released today by UK Finance confirm what we already knew – that the market was at best flat over 2019 as a whole. While loans to first-time-buyers were down only modestly (a fall of 0.6%), this was in spite of various measures aimed at supporting that sector, and homemovers were clearly deterred by the ongoing political uncertainty around Brexit, with loans down 2% over the year.
“As more recent figures have shown, we began to see an upward turn towards the end of the year, and so far this has continued into Q1 2020 with buyers and vendors coming back into the market in strength. There is every reason to believe that with political uncertainty resolved to a degree, there is a real recovery on its way.
“The fly in the ointment now is the coronavirus. People’s health is the number one priority but we also need to minimise disruption to everyday life as this could have serious knock-on effects for people’s livelihoods in all walks of life. There’s a real risk it will stop the recovery its tracks.”
