New Council of Mortgage Lenders (CML) data on the characteristics of lending in October of 2014 show growth in lending trends to first-time buyers, home movers and buy-to-let but a decline in remortgaging. Monthly highlights
- First-time buyers saw a month-on-month lending increase, with 29,900 first-time buyer loans in October - 12% more than in September, and 14% up on October 2013.
- By value, there was £4.4 billion advanced to first-time buyers in October - 10% up on September and 22% higher than October last year.
Gross mortgage lending reached £18.6 billion in October. This is 3% higher than September (£18.1 billion), and 6% higher than October last year (£17.5 billion). This is the highest lending total for an October since 2007 (£33.1 billion).
First-time buyers borrowing 3.39 times gross income
First-time buyer affordability changed fractionally, with first-time buyers typically borrowing 3.39 times their gross income, compared to 3.40 in September. The typical loan size for first-time buyers fell slightly month-on-month to £125,800 in October, down from £126,000 in September. The typical gross income of a first-time buyer household changed slightly to £38,820 in October from £38,714 in September.
First-time buyers in October paid 19.5% of gross income towards covering capital and interest payments, little changed from 19.6% in September but still significantly less than the recent peak of 24.8% in December 2007.
Paul Smee, director general of the
CML: “This has been a year of change for the industry, but the market has shown remarkable stability with house purchase and buy-to-let lending showing steady, consistent growth throughout 2014 compared to 2013.
"Stamp duty reform was long overdue and it is welcome that the tax has been changed. It will now be interesting to see how the market reacts. The new structure should be less of a barrier to mobility for those looking to get on the housing ladder or to switch homes." Other highlights:
1) Lending to home movers also strengthened month-on-month.
2) Remortgage lending activity saw a decline month-on-month in October, with the number of remortgage loans totalling 26,600.
3) Compared to October 2013, the number of buy-to-let loans increased 22% and the value of these loans went up 29%.
Further detail
here.
