Home buyer activity in April down on March but up on a year ago
On a non-seasonally adjusted basis, lending in April:
- Home buyers borrowed £9.6bn, down 14% on March but up 19% on April 2016. This came to 51,200 loans, down 16% on March but up 9% on April 2016.
- Within this, first-time buyers borrowed £4.1bn, down 16% on March but up 8% on April 2016. They took out 25,400 loans, down 18% month-on-month but up 2% year-on-year.
- Meanwhile, home movers borrowed £5.5bn, down 11% on March but up 28% year-on-year. This equated to 25,700 loans, down 15% month-on-month but up 17% compared to April 2016.
- Home-owner remortgage activity was down 16% by value and 18% by volume on March. Compared to a year ago, remortgage lending was down 15% by value and 16% by volume.
- Gross buy-to-let saw month-on-month decreases, down 17% by value and 16% by volume. Compared to April 2016, the number of loans increased 1% and the amount borrowed remained unchanged.
Paul Smee, director general of the CML, commented:
April comparisons are distorted by the weakness last year following the stamp duty changes, and the normal seasonal lending surge in March. But the seasonally-adjusted picture shows lending relatively unchanged month-on-month across all lending segments.
Heading into the summer months, we expect the market to remain slightly lopsided. Buy-to-let and home movers may well remain subdued, as they have been for the last six months. But both first-time buyer and remortgage lending should maintain momentum on the coattails of the attractive deals available.
Home-owner house purchase and remortgage lending
On a seasonally adjusted period, first-time buyers and home movers went up by value and remained relatively unchanged by volume compared to March. Buy-to-let and remortgage activity also remained relatively unchanged in April from March. Full seasonally and non-seasonally adjusted data can be downloaded at the bottom of the page.
The proportion of household income used to service capital and interest rates continued to be near historic lows in April for both first-time buyers and home movers at 17.3% and 17.5% respectively.
Affordability metrics for first-time buyers saw the typical loan size increase from £133,500 in March to £136,500 in April. The average household income increased to £40,700 from £40,000. This meant the income multiple went from 3.53 to 3.57.
The average amount borrowed by home movers in the UK increased to £176,500 from £172,400 the previous month, while the average home mover household income increased month-on-month from £54,100 to £55,200. The income multiple for the average home mover went up to 3.35 from 3.34.
Chart 1: Number of loans to home-owners, 2007-2017
Source: CML Regulated Mortgage Survey
Buy-to-let lending in April
Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. The number of loans for buy-to-let house purchase advanced in April remained low compared to activity seen before the change on stamp duty on second properties introduced in April last year.
Chart 2: Number of loans for buy-to-let
Source: CML Economics (pre-2013 data based on quarterly data)
Table 1: Number of loans for house purchase and remortgage in April
| House purchase | Remortgage | ||||
| FTBs | Movers | Buy-to-let | Home owners | Buy-to-let | |
| April 2016 | 24,800 | 22,000 | 4,200 | 34,700 | 11,800 |
| March 2017 | 31,100 | 30,100 | 6,700 | 35,800 | 12,500 |
| April 2017 | 25,400 | 25,700 | 5,300 | 29,300 | 10,800 |
| 1 month change | -18.3% | -14.6% | -20.9% | -18.2% | -13.6% |
| 12 month change | +2.4% | +16.8% | +26.2% | -15.6% | -8.5% |
Table 2: Value of loans for house purchase and remortgage in April
| House purchase (£m) | Remortgage (£m) | ||||
| FTBs | Movers | Buy-to-let | Home owners | Buy-to-let | |
| April 2016 | 3,800 | 4,300 | 600 | 6,000 | 1,900 |
| March 2017 | 4,900 | 6,200 | 900 | 6,100 | 1,900 |
| April 2017 | 4,100 | 5,500 | 800 | 5,100 | 1,700 |
| 1 month change | -16.3% | -11.3% | -11.1% | -16.4% | -10.5% |
| 12 month change | +7.9% | +27.9% | +33.3% | -15.0% | -10.5% |
Kindly shared by cml
Whilst the rate of property values rising in the wider market slows, first time buyers still face higher asking prices.
According to Rightmove, November saw asking prices decline by 1.1%, a statistic which led the online property portal to describe the market as “resilient”. The decline was less than the average for this time of year; a fall of 1.8%.
The last 12 months have seen the average asking price increasing by 4.5%. First time buyers felt this increase the most however, as they will usually be in search of properties with two bedrooms or less.
For this type of home, the average asking price rose by 8.2% over the last year, which was more than the 5.4% growth of so called ‘second-stepper’ homes. This was the only type of property which had price growth on a monthly basis. This followed the low levels of new property listings, as reported by the Royal Institution of Chartered Surveyors (RICS).
