Improved mortgage lending recorded in most parts of the UK in second quarter of 2017
Lending to home buyers improved across the UK in the second quarter of 2017, with mortgages in London bouncing back and in Scotland first time buyers driving the most growth since 2007.
The latest data from UK Finance shows that home buyers borrowed £6.1 billion in London, up 11% quarter on quarter and 17% year on year. They took out 18,000 loans, up 6% compared to the previous quarter and 8% on the second quarter 2016.
First time buyers in London borrowed £3.1 billion, up 10% on the first quarter and 8% on the second quarter of last year, equating to 10,600 loans, up 5% quarter on quarter and 3% year on year.
Home movers borrowed £3 billion, up 11% quarter on quarter and 28% compared to a year ago, some 7,400 loans, up 7% quarter on quarter and 18% compared to the same quarter in 2016.
‘Home buying in London bounced back from the traditionally subdued beginning of the year, with both first time buyer and home mover lending showing growth both on the first quarter of 2017 and on the same period a year ago,’ said Paul Smee, UK Finance head of mortgages.
‘The housing market in Greater London has some unique characteristics compared to the rest of the UK with more first time buyers, but lower overall levels of home ownership. Affordability and the supply of housing remain critical factors to manage for the London market if positive activity is to continue going forward.
In Scotland home buyers borrowed £2.5 billion in the second quarter, up 35% quarter on quarter and 18% year on year. They took out 18,800 loans, up 30% compared to the previous quarter and 15% on the second quarter 2016.
First time buyers borrowed £1.1 billion, up 29% on the first quarter and 17% on the second quarter last year. This totalled 9,500 loans, up 25% quarter on quarter and 15% year on year.
Home movers borrowed £1.5 billion, up 39% quarter on quarter and 20% compared to a year ago. This totalled 9,300 loans, up 37% quarter on quarter and 16% compared to the same quarter in 2016.
Remortgage activity totalled £900 million, down 7% on the first quarter but up 7% on the same quarter last year. This came to 7,300 loans, down 10% quarter on quarter but up 4% compared to a year ago.
‘There were more home buyers in Scotland in the second quarter of 2017 than any other quarter since 2007. First time buyers have been a key driver of this, with two years of year on year growth,’ said Carol Anderson, chair of the UK Finance Scotland mortgage committee.
‘With an economic climate of low interest rates, government schemes and competitive mortgage deals, the Scottish market is in a good position and open to business going forward,’ she added.
In Wales home buyers borrowed £1.1 billion, up 26% quarter on quarter and 19% year on year. They took out 8,100 loans, up 23% compared to the previous quarter and 14% on the second quarter of 2016.
First time buyers borrowed £490 million, up 26% on the first quarter and 17% on the second quarter of last year, totalling 4,200 loans, up 24% quarter on quarter and 14% year on year.
Home movers borrowed £580 million, up 26% quarter on quarter and 21% compared to a year ago. This totalled 3,900 loans, up 22% quarter on quarter and 15% compared to the same quarter in 2016.
Remortgage activity totalled £470 million, down 10% on the first quarter but up 4% on the same quarter last year. This came to 4,100 loans, down 11% quarter on quarter but up 2% compared to a year ago.
‘It is very positive to see growth among both first time buyers and home movers, making this the strongest second quarter for home buying activity in Wales since 2007. Affordability continues to be better in Wales than the UK overall, and with attractive mortgage rates and a wide range of choice in the market currently; we expect this level of activity to continue going forward,’ said Julie Ann Haines, chair of the UK Finance Wales mortgage committee.
According to Toby Whittome, London sales director at Jackson-Stops & Staff, strong levels of lending activity are almost certainly emanating from the lower to mid-levels of the greater London regional property market.
‘If stamp duty levels weren’t causing so much harm in the million plus market, which is focused in London, I think we would see this health and fluidity spread to the higher end of the market too. If London was firing on all cylinders at every level, just imagine how positive it would look to the rest of the world,’ he pointed out.
Richard Sexton, director at e.surv, some parts of the country prove to be more fruitful for small deposit buyers while at the other end of the spectrum, London is seeing more demand from large deposit buyers, where 41% of all mortgages granted in the region are to those with a large deposit.
‘Although buyers don’t make the decision on where to live based on the chances of their mortgage being approved, these significant regional differences have an effect on first time buyers. To ensure a more fluid housing market across the country, the Government must fulfil its promises and addresses the lack of accessible housing throughout the country,’ he said.
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