Home-owner house purchase lending fell in February both compared to the previous month and February 2014, the Council of Mortgage Lenders (CML) has reported.
The number of loans advanced totalled 40,600, down 1% on January and 16% compared to the same month in 2014. These loans totalled £6.8bn, which was down 3% on January and 13% on February last year.
There were 18,700 loans advanced to first-time buyers – down 1% on January and 16% compared to February 2014. These loans by value were £2.7 billion, which was down 4% on January and 13% down on February last year.
The CML also found that home movers were advanced 21,900 loans, a decline of 2% compared to January and 16% down year-on-year. These loans totalled in value £4.1bn – 2% down on January and 13% down compared to February 2014.
Remortgage lending decreased month-on-month with 21,500 loans advanced – down 16% on January and 14% down on February 2014. The value of these loans (£3.3 billion) also decreased month-on-month by 20% and was down 11% year-on-year compared to February 2014.
There were 15,900 buy-to-let loans in February – down 13% on the previous month but up 11% on the same period in 2014. These loans came to £2.2bn in value, down 12% compared to January but up 16% on February 2014.
Paul Smee, director general of the CML, said: “As with January, seasonal factors have played their part in dampening house purchase lending activity in February. This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months. Buy-to-let, in contrast, has shown year-on-year lending increases, due almost completely to remortgaging which is typically strong in the buy-to-let market.
“We this month launched the CML buy-to-let statement of practice which reflects what responsible lenders already do and offers a clear explanation of how buy-to-let lenders operate. We hope it will help in people’s understanding of the buy-to-let lending environment and the transparency of the statement of practice can give confidence to landlords that clear and consistent lending policies are being undertaken.”
Karen Bennett, sales and marketing director for commercial mortgages at Shawbrook Bank, added: “A contributing factor to the fall in February’s overall mortgage lending is likely to be the general feeling of uncertainty that is always in the market when we approach an election, combined with the continued impact of tighter lending criteria on owner-occupiers.
“As part of this, we are seeing the more specialist buy-to-let market stabilising, with less rapid, but still robust, growth than in previous years. As professional investors continue to expand their portfolios and add value by refurbishing or renovating, the signs are there for a continuing strong mortgage market. In order to ensure market sustainability, brokers should always encourage responsible borrowing by clients.”