The total number of loans advanced to home-owners for house purchase decreased in January, down 16% compared to December but up 30% on January 2013, according to the Council of Mortgage Lenders (CML).
Overall, 48,600 loans were advanced in January with a total in value of £8bn, which was a decrease of 14% in value on December 2013 but a 43% increase in comparison to January 2013.
The total number of loans advanced to first-time buyers in January totalled 21,800, down 18% on December 2013, but an increase of 38% compared to January 2013. The total value of these loans was £3.1bn, down 16% on December 2013, but a year-on-year increase of 55% in comparison to January 2013.
The typical first-time buyer income multiple decreased, with first-time buyers typically borrowing 3.39 times their gross income in January, compared to 3.43 in December 2013. First-time buyers in January spent 19.3% of gross income to cover capital and interest payments, slightly higher than the 19.2% in December 2013 but down from 19.8% in January 2013. In addition, over 95% of first-time buyers opted for fixed rate mortgages in January.
It appears that the introduction of the Help to Buy mortgage guarantee scheme has started to have an impact on FTB deposit requirements. The average loan-to-value for first-time buyers was 82% in January, up from 80% seen in December 2013 and a year previous in January 2013.
The number of loans advanced to home movers for house purchase totalled 26,800 in January, down 15% in volume compared to December but up by 25% compared to January 2013. Home mover loans totalled £4.9bn in value in January, which was a month-on-month decrease of 13% compared to December, but up 36% compared to January 2013.
In contrast to the month-on-month decrease in lending for home-owner house purchase, home-owner remortgage activity increased in January with a total of 28,000 remortgage loans advanced, up 10% in volume compared to December and up 16% compared to January 2013. These loans totalled £4.2bn in value, an increase of 11% on December and up 31% compared to January 2013.
Gross buy-to-let advances in January totalled 15,700 loans, which was up 8% compared to December 2013 and up 37% compared to January 2013. The value of these loans totalled £2.1bn, which was an increase of 11% compared to December and up 40% compared to January 2013.
Similarly, Buy-to-let loans for house purchase followed the same trend up 11% in January to 8,100 loans in total compared to December, and up 34% compared to January last year. The loans totalled £900m in value, which again was up 7% compared to December and up 32% compared to January 2013.
In parallel to this, buy-to-let remortgage lending increased in January to 7,500 loans, which was up 6% compared to December and up 42% compared to January 2013. These buy-to-let remortgages had a total value of £1.1bn, up 10% compared to December and a year-on-year increase of 55% compared to January 2013.
Paul Smee, director general of the CML, said: “January is always a subdued month in the mortgage market but the underlying trend and strong year-on-year growth across all borrower groups indicates a strong start to 2014 continuing the sort of lending levels seen throughout 2013.
“Lending to first-time buyers and home movers has continued its upward trend and this, coupled with the growth in remortgage and buy-to-let activity, would suggest that all parts of the market are open for business.”