House purchase lending up five per cent in November

On an unadjusted basis, in November:

Home- owners borrowed £11bn for house purchases, up five per cent month- onmonth and two per cent year- on-year. They took out 60,800 loans, up five per cent on October and up 0.2 per cent on November 2015. First-time buyers borrowed £4.7bn, up four per cent on October and nine per cent on November last year. This equated to 30,100 loans, up five per cent month- onmonth and eight per cent year- on-year. Home movers borrowed £6.3bn, up seven per cent on a month ago but down five per cent compared to a year ago. This represented 30,700 loans, up six per cent monthon- month but down six per cent on November 2015. Remortgage activity totalled £5.8bn, down five per cent on October but up 14 per cent compared to a year ago. This came to 34,700 loans, unchanged month- on- month but up 13 per cent compared to a year ago. Landlords borrowed £3.2bn, up 10 per cent month- onmonth but down nine per cent year- on-year. This came to 21,000 loans in total, up 13 per cent compared to October but down 10 per cent compared to November 2015. The Council for Mortgage Lenders (CML) now publishes seasonally adjusted monthly data, alongside the normal unadjusted data. This makes it easier to spot underlying trends. Paul Smee, director general of the CML, commented: ‘ November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change and aspirations for home- ownership remain strong in the UK. Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but we still predict 1.2 m transactions and a slight increase in gross lending to £248bn. ‘ Buy- to- let lending, driven by remortgage activity, saw its strongest monthly lending level since the stamp duty changes on second properties introduced last April. Despite this, we expect buy-to- let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak as further tax changes take effect.’

Home- owner house purchase lending

The proportion of household income used to service capital and interest rates reached another historic low this month for both first-time buyers and home movers at 17.5 per cent. Affordability metrics for first- time buyers saw the typical loan size increase from £133,400 in October to £134,200 in November. The average household income remained unchanged month- onmonth at £40,000. This meant the income multiple went from 3.56 to 3.54. The average amount borrowed by home movers in the UK decreased to £171,000 in November from £172,000 in October, while the average home mover household income decreased slightly to £54,800 from £54,900. The income multiple for the average home mover went from 3.26 to 3.27. On a seasonally adjusted basis, in contrast to the non-seasonally adjusted figures, the number of loans to first- time buyers declined month- on- month, but still increased year- on-year. The volume of home mover loans in November declined both month- on- month and year- onyear on a seasonally adjusted basis. Buy-to- let and remortgage activity remained relatively similar on a seasonally adjusted and non-seasonally adjusted basis.