Mixed picture in December but first-time buyer lending healthy, says CML

Lending in December:

Home- owner house purchase lending totalled £11.6bn in December, up five per cent on November and three per cent on December 2015. This came to 63,600 loans, up five per cent on November and 0.2 per cent on December 2015.

First-time buyers borrowed £5.1bn for home- owner house purchase, up nine per cent on November and 13 per cent on December 2015. This totalled 32,000 loans, up seven per cent month- on- month and eight per cent year- on-year.

Home movers borrowed £6.5bn, up three per cent on November but down three per cent year- onyear. This totalled 31,600 loans, up three per cent month- onmonth but down seven per cent compared to December 2015.

Home- owner remortgage activity was down 21 per cent by volume and by value compared to November. Compared to December 2015, remortgage lending was up seven per cent by volume and by value.

Gross buy-to- let saw monthon- month decreases, down 15 per cent by volume and seven per cent by value. Compared to December 2015, the number of loans decreased 21 per cent and the value of these loans decreased 18 per cent.

Lending in the fourth quarter of 2016:

Home- owner house purchase lending fell in the fourth quarter to £33.1bn, down three per cent on the third quarter and two per cent on the same quarter 2015. This totalled 182,000 loans, down two per cent on the previous quarter and four per cent on the final period of 2015.

First-time buyers took out 90,800 loans totalling £14.3bn to purchase homes. This was down one per cent by volume and value on the third quarter, but up four per cent by volume and seven per cent by value year- on-year.

Home movers took out 91,300 loans, down four per cent quarteron- quarter and 11 per cent compared to the fourth quarter 2015. This came to £18.7bn, down six per cent on quarter three and nine per cent year- on-year.

Home- owner remortgage activity came to £16.6bn, down five per cent on the previous quarter but up 10 per cent on the fourth quarter 2015. The number of remortgage loans came to 97,500, down three per cent on the third quarter but up nine per cent on the same quarter in 2015.

Gross buy-to- let lending decreased to £6bn, down two per cent on the previous quarter and three per cent on the same quarter in 2015. This totalled 57,400 loans, up two per cent quarter- on- quarter but down 20 per cent year- on-year.

Lending in 2016:

Home buyers borrowed £127.7bn in 2016, up seven per cent on 2015. This came to 698,900 loans, up three per cent on 2015.

First-time buyers borrowed £53.2bn for home- owner house purchase in 2016, up 13 per cent on 2015. This totalled 338,900 loans, up eight per cent from the previous year. First-time buyers borrowed more in 2016 than any other year since our records began in 1974.

Home movers took out 360,300 loans, down two per cent on 2015, but the amount borrowed totalled £74.3bn which was up three per cent on 2015.

Home- owner remortgage activity was up 14 per cent by volume and 20 per cent by value compared to 2015. The number of remortgage loans was at its highest since 2009.

Gross buy-to- let also saw yearon-year increases, up three per cent by volume and seven per cent by value, with remortgage business accounting for nearly two thirds of the total.

Home- owner house purchase lending in December

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 17.4 per cent and 17.5 per cent respectively.

Affordability metrics for firsttime buyers saw the typical loan size increase from £134,100 in November to £136,000 in December. The average household income increased to £40,400 from £40,100. This meant the income multiple went from 3.54 to 3.57.

The average amount borrowed by home movers in the UK increased to £175,000 in December from £170,900 in November, while the average home mover household income increased slightly to £55,000 from £54,800. The income multiple for the average home mover went from 3.27 to 3.32.

On a seasonally adjusted basis, remortgage and buy-to- let activity differed markedly from the unadjusted figures. While remortgage lending decreased 21 per cent in November on an unadjusted basis, on a seasonally adjusted basis it was a decline of only two per cent. Buy-to- let lending was unchanged on a seasonally adjusted basis in December compared to the previous month and December 2015, despite the non-seasonally adjusted levels showing a decline.