Mortgage lending grows in March, but falls below 2016 levels

Mortgage lending in March was up 24% on February, but has fallen 19% when compared to March 2016, new data reveals.

New figures from the Council of Mortgage Lenders (CML) show that home buyers borrowed £11.2bn in March this year, a 24% increase month-on-month, but 19% down year-on-year.

This equated to 61,700 loans, a 27% rise on February’s figures, but 12% below March 2016.

First-time buyers took out 31,500 loans, up on a monthly and yearly basis by 30% and 12% respectively.  This equated to £4.9bn, a 29% rise on February and a 9% rise on March 2016.

Lending to home movers showed a mixed picture.  At £6.2bn, lending to this sector was up 19% month-on-month but down 33% year-on-year. 

Home movers took out 30,200 loans, up 24% on February, but down 28% on March 2016.

The remortgage market saw home owner activity rise 13% by value and 14% by volume month-on-month.  On a yearly basis, remortgage lending was also up, rising 22% by value and 24% by volume. 

Reflecting the impact of the stamp duty reform which came into effect last April, year-on-year gross buy to lending fell 58% by volume and 60% by value. But on a monthly basis, gross buy to let was up 4% by value and 8% by volume.

Quarterly figures revealed that home buyers borrowed £28.6bn in Q1 2017, 13% down on Q4 2016 and 7% down on the first quarter 2016. This equated to 156,000 loans, 13% below Q4 2016 and 5% below Q1 last year.

CML Paul Smee, director general, CML, said:

“Overall, lending trends have remained reasonably consistent.

“The relatively sluggish activity among home movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected.

“As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available.”

 

Steve Olejnik, COO of Mortgages for Business, said:

“As expected, lending to landlords has slowed. This was the government’s aim and means that over the last 12 months buy to let lending by volume has dropped back to just 15% of all mortgage lending.

This is a much healthier proportion of the total market and hopefully, will put a stop to the introduction of any further measures to curb buy to let, until we have had time to fully consider the new fiscal and regulatory environment being imposed on landlords.”

 

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