Home buyer activity in April down on March but up on a year ago

On a non-seasonally adjusted basis, lending in April: Home buyers borrowed £9.6bn, down 14 per cent on March but up 19 per cent on April 2016. This came to 51,200 loans, down 16 per cent on March but up nine per cent on April 2016. Within this, first-time buyers borrowed £4.1bn, down 16 per cent on March but up eight per cent on April 2016. They took out 25,400 loans, down 18 per cent month-on-month but up two per cent year-on-year.

Meanwhile, home movers borrowed £5.5bn, down 11 per cent on March but up 28 per cent year-on-year. This equated to 25,700 loans, down 15 per cent monthon-month but up 17 per cent compared to April 2016.

Home-owner remortgage activity was down 16 per cent by value and 18 per cent by volume on March. Compared to a year ago, remortgage lending was down 15 per cent by value and 16 per cent by volume.

Gross buy-to-let saw month-on-month decreases, down 17 per cent by value and 16 per cent by volume. Compared to April 2016, the number of loans increased one per cent and the amount borrowed remained unchanged.

Paul Smee, director general of the CML, commented: ‘April comparisons are distorted by the weakness last year following the stamp duty changes, and the normal seasonal lending surge in March.

‘But the seasonally-adjusted picture shows lending relatively unchanged month-on-month across all lending segments.

‘Heading into the summer months, we expect the market to remain slightly lopsided. Buy-to-let and home movers may well remain subdued, as they have been for the past six months. But both first-time buyer and remortgage lending should maintain momentum on the coattails of the attractive deals available.’

On a seasonally adjusted period, firsttime buyers and home movers went up by value and remained relatively unchanged by volume compared to March. Buy-to-let and remortgage activity also remained relatively unchanged in April from March. The proportion of household income used to service capital and interest rates continued to be near historic lows in April for both first-time buyers and home movers at 17.3 per cent and 17.5 per cent respectively.

Affordability metrics for first-time buyers saw the typical loan size increase from £133,500 in March to £136,500 in April. The average household income increased to £40,700 from £40,000. This meant the income multiple went from 3.53 to 3.57. The average amount borrowed by home movers in the UK increased to £176,500 from £172,400 the previous month, while the average home mover household income increased month-on-month from £54,100 to £55,200. The income multiple for the average home mover went up to 3.35 from 3.34.