Landlord purchases jump as first-time buyer sales fall
Buy-to-let purchases jumped in the first quarter of 2020, but first-time buyer sales dropped, leaving overall mortgage lending flat, according to UK Finance.
The figures were largely unaffected by the coronavirus and lockdown, which hit in the final couple of weeks of the three months to the end of March.
During that period buy-to-let activity increased seven per cent, with 5,600 purchase mortgages in March compared to 5,300 in the same period a year earlier. Remortgage landlord deals were flat.
However, first-time buyer numbers continued to decline, a trend which has been in play since October last year.
In March there were 26,410 mortgages, compared to 28,210 a year earlier.
There were stark regional differences in overall mortgage lending, with London and the South, performing better than the rest of the country.
Arrears were lower in the first quarter, compared to a year earlier – with payment holidays not included in the data.
Consumer spending down
The data from UK Finance also showed a sharp fall in credit card borrowing as consumer spending falls in response to coronavirus lockdown.
Eric Leenders, managing director, personal finance at UK Finance, said: “Following a subdued year in the mortgage market in 2019, any signs we might have seen of improving confidence translating into increased homemover activity at the turn of this year have currently been overtaken by the impact of the Covid-19 pandemic.
“Further evidence of the crisis is evident in unsecured borrowing. The sharp reduction in consumer spending has flowed through to a fall in credit card borrowing.
“We’ve also seen further increases in deposits held by households.”