In December 2015 first-time buyers borrowed £4.5bn for home-owner house purchase, up 7% on November and 18% on December last year. This totalled 29,300 loans, up 6% month-on-month and 11% year-on-year, the Council of Mortgage Lenders (CML) has revealed.
During the final month of last year, home movers borrowed £6.6bn, up 2% on November and 20% year-on-year. This totalled 33,400 loans, up 3% month-on-month and 12% compared to December 2014.
Meanwhile, home-owner remortgage activity was down 16% by volume and 16% by value compared to November. Compared to December 2014, remortgage lending was up 14% by volume and up 24% by value. Gross buy-to-let saw month-on-month decreases, down 3% by volume and 3% by value, but the growth year-on-year continued.
The CML reported that, during the fourth quarter of 2015, first-time buyers took out 87,100 loans totalling £13.3bn to purchase homes. This was up by volume 3% on the third quarter and 14% on the fourth quarter 2014 and by value it was up 3% quarter-on-quarter and 8% year-on-year.
Home movers took out 101,900 loans, down 1% quarter-on-quarter but up 9% compared to the fourth quarter 2014. This totalled £20.3bn, down 3% on quarter three but up 18% year-on-year.
In addition, home-owner remortgage activity was up 4% by volume and 6% by value compared to the third quarter. Compared to the fourth quarter 2014, remortgage lending was up 21% by volume and up 35% by value.
Gross buy-to-let saw a slight quarter-to-quarter decrease, down 1% by volume and 1% by value, but year-on-year growth continues.
The CML said that, looking on an annual basis, first-time buyers borrowed £46.7bn for home-owner house purchase in 2015, which was up 4% on 2014. This totalled 311,700 loans, unchanged from the previous year. First-time buyer lending was at its highest since 2007.
Home movers took out 365,800 loans, down 0.2% on 2014, but the amount borrowed totalled £72.1bn was up 7% on 2014. Lending was at its annual highest since 2007.
Home-owner remortgage activity was up 11% by volume and 20% by value compared to 2014. The value of remortgage lending was at its highest since 2008.
Gross buy-to-let also saw year-on-year increases, up 28% by volume and 39% by value. Buy-to-let lending was at its highest since 2007.
Paul Smee, director general of the CML, said: “Improving economic conditions, boosted by government schemes like Help to Buy, saw the highest quarterly number of loans to purchase a home for eight years.
“The market has seen a gradual upward trajectory over the past few years, rather than rapid growth, and we’d expect this trend to continue with gross lending steadily increasing over the next two years.”
“After a brief cooldown in November, residential purchase lending picked up again in December,” added Brian Murphy, head of lending at Mortgage Advice Bureau (MAB). “Over the past 12 months purchase lending has increased across the board, and there is still plenty of appetite among lenders and borrowers alike. Borrowers have certainly benefited from very competitive rates, boosting affordability for those meeting lenders’ criteria. With the base rate going nowhere fast, consumers will continue to reap the benefits of low rates for some time.
“Lending to remortgagers fell in December, which is to be expected given the time of year. Low rates and high levels of homeowner equity mean remortgage lending is unlikely to stay subdued for long, with many homeowners in a strong position to access better deals.
“As house prices rise it is important that lending grows in order to keep the market inclusive. It’s disappointing that the total number of first-time buyer loans last year remained unchanged from 2014, and many face difficulties in getting on the property ladder – especially in areas like London and the South-East where prices are rising fastest. Government and industry must work together to ensure that new buyers are catered for, and that limited housing supply is addressed.”