The Council of Mortgage Lenders (CML) has revealed that in September, home-owners borrowed £11.4bn for house purchase, down 7% month-on-month but up 4% year-on-year.
They took out 62,900 loans, down 5% on August but up 3% on September 2015.
First-time buyers borrowed £4.9bn, down 4% on August but up 14% on September last year. This equated to 31,500 loans, down 1% month-on-month but up 13% year-on-year. Home movers borrowed £6.5bn, down 9% on a month ago and 3% compared to a year ago. This represented 31,400 loans, down 8% month-on-month and 5% on September 2015.
Remortgage activity totalled £5.5bn, down 7% on August but up 8% compared to a year ago. This came to 31,500 loans, down 10% month-on-month but up 2% compared to a year ago.
Landlords borrowed £2.8bn, down 7% month-on-month and 22% year-on-year. This came to 18,200 loans in total, down 6% compared to August and 26% compared to September 2015.
The CML said that, in the third quarter, home-owners borrowed £34.3bn for house purchase, up 16% quarter-on-quarter and 1% year-on-year. They took out 187,200 loans, up 12% on the second quarter but down 1% on the third quarter 2015.
First-time buyers borrowed £14.5bn, up 8% on the second quarter and 12% on the third quarter last year. This equated to 91,600 loans, up 7% quarter-on-quarter and 8% year-on-year.
Home movers borrowed £19.8bn, up 22% on the last quarter but down 6% compared to a year ago. This represented 95,600 loans, up 17% quarter-on-quarter but down 8% on the same quarter in 2015.
Remortgage activity totalled £17.5bn, up 5% on the second quarter and 22% on the same quarter a year ago. This came to 100,100 loans, up 3% quarter-on-quarter and 16% compared to a year ago.
Landlords borrowed £8.8bn, up 10% quarter-on-quarter but down 19% year-on-year. This came to 56,200 loans in total, up 9% compared to the second quarter but down 24% compared to the third quarter in 2015.
Paul Smee, director general of the CML, said: “House purchase activity appears to have steadied, we may not be seeing huge increases in activity on the scale of 2013-14 but there is a consistency in the levels in recent months. Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the re-pricing of mortgages following August’s base rate cut. This should help turn strong appetite for home-ownership into a reality as we approach the closing months of the year.
“Six months on since the stamp duty changes on second properties and buy-to-let continues to operate at lower levels than a year ago. But lending for buy-to-let house purchase and remortgaging has settled at its current level over the last four months.”
Matt Andrews, managing director of Bluestone Mortgages, added: “It’s encouraging to see an annual increase in first-time buyer activity. Clearly, many people are still taking advantage of the record low interest rates and taking their first steps onto the property ladder.
“However, there are still many potential buyers out there who are unable to get a loan, even if they are creditworthy. Contractors, the self-employed, or those with an adverse credit history will not always fit traditional lending criteria and are often forced out of the market as a result.
“More lenders need to recognise the fact that the UK workforce has begun to change, with the number of contractors shooting up by 35% over the past three years alone. Borrowers like these need to have a personal underwriting experience that takes their particular circumstances into account. If more lenders begin to adopt this approach, rather than relying on credit scores alone, many hopeful buyers will finally get the chance to see their dreams of homeownership become a reality.”