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Mortgage lending jumps 10% as buy to let takes a hit

Written by: Lana Clements
Lending saw a double digit annual rise, but the share of mortgages to landlords falls to five-year low
Mortgage lending jumps 10% as buy to let takes a hit

Mortgage lending hit £69.1bn in the final three months of 2017, a 10% increase from the same period a year earlier, according to quarterly Bank of England data.

Activity in the traditionally slower final quarter of the year, was 2.5% lower from the previous three months, the data showed.

At the same time, new commitments increased 5.2% annually to £64.9bn.

However, the market’s share of buy-to-let lending fell to 12.7% at the end of 2017 – the lowest percentage since 2013.

First-time buyer numbers leap

At the same time, first-time buyers’ share of mortgage lending increased to 21.1%.

The total value of outstanding residential lending stood at £1,395bn in Q4 2017.

There was a slight fall in the amount of new loans for house purchases, driven by a decrease in home movers, the Bank of England said.

On the other hand, the proportion of lending to borrowers in the form of remortgages increased to 29.7% of the market.

The proportion of total loan balances in arrears continued to decrease and was at a record low of 1.08% at the end of Q4 2017.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Remortgaging continues to be strong into this year, even though many lenders have now repriced their rates slightly higher in anticipation of another rate rise sooner rather than later.

“There was a welcome increase in number of first-time buyers as they continue to take advantage of the more level playing field between them and buy-to-let investors.

“Lending for buy-to-let was subdued as the impact of the stamp duty surcharge and the phased introduction of changes to mortgage interest tax relief continues to act as a deterrent for some.”

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