House purchase lending experienced 16 per cent monthly growth in March

Recent figures from the Council of Mortgage Lenders (CML) show Q1 experienced considerable growth in house purchase lending with a 16 per cent rise month on month in March

The data, which defined trends via buy to let, first-time buyer, home mover and re-mortgaging activity, considered the overall state of lending in the UK and noted increases across all sectors.

Although activity remained relatively subdued, Paul Smee – the CML’s Director General – said the market had “started to get out of the dip” from March.

Buy to let

Buy to let loans experienced a 12 per cent monthly rise and 21 per cent annual rise while their total value – some £2.7 billion – was 13 per cent and 35 per cent greater by the same comparisons.

Expanding to look at Q1 as a whole, buy to let accounted for 18 per cent of gross lending in the highest proportion ever reported.

Although buy to let home purchase loans were down eight per cent on Q4 2014, they were six per cent higher than Q1 2014 with a value of £3.3 billion.

Buy to let re-mortgaging loans were worth £4.2 billion – unchanged from the previous quarter but 29 per cent higher than a year ago.

First-time buyer

First-time buyers took 23,000 loans in March 2015; up 20 per cent from the month before but down five per cent from a year previously.

The value of loans was up across all comparisons though – totalling £3.4 billion to represent a 21 per cent increase from February 2015 and three per cent increase from March 2014.

Typical first-time buyer loan sizes also dropped to £122,794 in Q1 2015 from £124,450 in Q4 2014.

Home mover

Home movers secured 14 per cent more loans this March than the month before, although this figure was still three per cent lower year-on-year.

These loans were valued at a collective £4.9 billion which was 17 per cent higher month-on-month and seven per cent higher across the year.

Home movers borrowed 3.06 times their gross income during Q1 2015 which represented a marginal increase from the previous quarter when they borrowed 3.03 times their income.

Re-mortgaging

Re-mortgaging activity was up 19 per cent on February 2015 and six per cent on March 2014 with the value of these loans 24 per cent higher on a monthly basis and 14 per cent annually.

The total value of re-mortgaging loans was £4.2 billion for the month of March and £11.8 billion for Q1 overall.

This represented quarterly growth of six per cent and annual growth of two per cent despite the number of re-mortgaging loans taken declining five percent quarter-on-quarter.

17th June 2015