Buy-to-let lending climbs while loans to home buyers and movers drop

14th January 2015

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Lending to first-time buyers,  home movers and those remortgaging dropped in November, new figures reveal.

First-time buyers saw a month-on-month lending decline, with 25,900 first-time buyer loans in November – down 11% on October, and 3% down on November 2013, according to the Council of Mortgage Lenders.

By value, there was £3.8 billion advanced to first-time buyers in November – 12% down on October but 6% up on November last year.

Lending to home movers also declined month-on-month. The number of loans advanced to movers was 29,700, a 13% fall on the previous month and down 10% on November last year.

By value, lending to movers totalled £5.4 billion, down 14% on October and 5% on November last year.

Remortgage lending activity saw a decline month-on-month in November, with the number of remortgage loans totalling 24,000.

This was 8% down on October and 16% down on November last year. The value of these loans (£3.6 billion) was down 10% on the previous month and down 14% on November last year.

There were 17,700 buy-to-let loans in November, representing lending of £2.4bn.

This was a decrease on the previous month with loan volumes down 10% and the value of these loans down 11%. Compared to November 2013, the number of loans increased 9% and the value of these loans went up 14%.

Brian Murphy, head of lending at Mortgage Advice Bureau, said:  “In sharp contrast to the soaring pace of lending at the beginning of 2014, there was a notable cooling in the rate of lending in November, with house purchase lending down 12% on the previous month and lending to first-time buyers down by 11% in the same period.  However, this is broadly in line with seasonal expectations, and year-on-year represented a fall of just 3%.

“The mortgage market faced a number of tough regulatory changes in 2014 that had the potential to significantly impact lending to consumers, so the fact that lending in November remained almost unchanged compared to the previous year is proof of the market’s resilience. Lending conditions in 2015 have already proved favourable for borrowers, with mortgage rates at record lows as the price war continues to gain momentum and the stamp duty changes announced in December further boosting demand.

“The CML’s outlook report for 2015 suggests that lending will continue to increase, although at a slower and more sustainable rate than in the previous year. Consumer demand is expected to remain buoyant, and a much smoother trajectory going forwards will help to keep conditions affordable.”

From today, Nationwide Building Society is reducing selected ten year fixed rates for existing borrowers looking for a new deal, with rates starting at 2.94%.

Selected two year fixed and tracker rates for existing customers looking to switch are also being reduced.

As part of the Nationwide Loyalty Rate Mortgages initiative, which compares the Society’s mortgage rates for existing customers to those of its top six high street competitors, selected switcher rates will be reduced by up to 0.45%.

 

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