Quantcast
Menu

First-time Buyers

Lending to buyers down 8% in October

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
15/12/2016

After a ‘tumultuous year’ homebuying figures are down while borrowers rush to remortgage

The number of mortgages taken out by homebuyers fell in October by 8% to reach 57,800, according to the Council of Mortgage Lenders – down 13% compared to a year earlier.

The value of these loans also fell to £10.5bn, falling 8% on a monthly basis and 11% annually.

Of these loans, borrowing among first-time buyers and homemovers fell both annually and monthly to reach £4.5bn and £5.9bn, respectively. The value of loans to first-time buyers is now 8% lower than September and 2% down on a year earlier, while lending to homemovers has dropped by a significant 18% since the same time last year and 9% a month earlier.

Remortgaging still strong

Remortgage activity continued to be strong, with loans totalling £6.1bn, 11% higher than September and up 7% on a year earlier. This came to 34,700 loans, up 10% month-on-month and 5% compared to a year ago.

Peter Williams, executive director of trade body the Intermediary Mortgage Lenders Association, said: “October’s lending figures are indicative of a market that is still finding its feet after a tumultuous year.

“The remortgage market has taken off this year with the total value of such loans now at their highest rate since the beginning of 2009, as consumers continue to take advantage of the historically low interest rates. However, with swap rates rising, now is probably a good time to remortgage as the best deals might not be around for too much longer.”

In the buy-to-let market, the value of buy-to-let loans was down 21% with the number of deals down 25% year on year.

Paul Smee, director general of the CML, added: “Buy-to-let house purchase lending remains weak following the change to Stamp Duty on second properties in April. With lenders are now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.”