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November rate rise did not deter borrowers, as lending increased

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16/01/2018
Lending for house purchases grew steadily, while the buy-to-let market saw a dip in activity
November rate rise did not deter borrowers, as lending increased

November saw steady increases in mortgage lending for first-time-buyers and home movers compared to both October and November 2016, said UK Finance.

According to the trade body, there were 34,800 new first-time buyer mortgages in the month, some 15.2% more than the same month a year earlier.

There was £5.6bn of new lending to those buying their first home in November, up 16.7% year-on-year.

The average first-time buyer is now 30 and has an income of £40,000.

Keep on moving

And despite the Bank of England hiking interest rates for the first time in 10 years, there were also more people choosing to move home in November.

There were 36,200 new home mover mortgages over the month, up 16.8% year-on-year. £7.5bn was lent to movers, 19% higher than the previous November.

The average home mover is 39 and has an income of £54,000.

Remortgaging also shot up in November, by 10.2% to £6.5bn.

Dip in buy-to-let lending

However, there was one area of the mortgage market that didn’t experience growth.

There were 6,600 new buy-to-let house purchase mortgages in the month, 1.5% fewer than in the same month a year earlier. By value this was £0.9bn of lending in the month, the same year-on-year.

There were 13,500 new buy-to-let remortgages in November, down 3.6% year on year. By value this was £2.1bn of lending in the month, 4.5% down year-on-year.

Paul Smee, head of mortgages at UK Finance, said: “The data shows housing market activity remains buoyant, despite November’s rise in the base rate. Steady increases in lending for house purchases together with increases in homeowner remortgages reflect a keenness among consumers to benefit from still historically low interest rates, and a highly competitive marketplace.

“In contrast, declines in buy-to-let lending reflect the changing regulatory and fiscal environment for landlord businesses, where some landlords might be inclined to reappraise the viability of their portfolios.”

Jonathan Hopper, managing director of Garrington Property Finders, added: “The market continues to flow broadly as it should, and the stand off between limited supply and cautious demand should nudge up prices further throughout 2018. But it will be steady progress at best.”

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