UK Finance has announced the latest first-time buyer activity statistics which show continued growth in June. Here is an overview of the main statistics:
On a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in June rose:
- First-time buyers borrowed £5.9bn, up 26% on the previous month and 9% on June 2016. This equated to 36,000 loans, up 22% month-on-month and 6% year-on-year.
- Home movers borrowed £7.8bn, up 26% on May and 15% year-on-year. This equated to 36,500 loans, up 24% month-on-month and 9% compared to a year ago.
- Home-owner remortgage activity totalled £6bn, up 5% by value on May and 7% on a year ago. The number of remortgage loans totalled 34,300, up 5% month-on-month and 6% on a year ago.
- Gross buy-to-let totalled £3.0bn, up 3% on May and up 3% compared to June 2016. These equated to 19,700 loans, up 3% month-on-month and 6% year-on-year.
On a non-seasonally adjusted basis, UK Finance shows that mortgage lending in the second quarter also rose:
- Home buyers borrowed £34.4bn, up 18% on Q1 and 24% on Q2 2016. This equated to 183,300 loans, up 16% on Q1 and 9% on Q2 2016.
- Within this, first-time buyers borrowed £14.8bn, up 18% on last quarter and 10% on Q2 2016. They took out 91,400 loans, up 15% quarter-on-quarter and 6% year-on-year.
- Home movers borrowed £19.6bn, up 19% on Q1 and 21% year-on-year. This equated to 92,200 loans, up 17% quarter-on-quarter and 13% compared to a year ago.
- Home-owner remortgage activity totalled £16.9bn, down 11% by value on Q1 but up 1% on a year ago. The number of remortgage loans totalled 96,900, down 12% quarter-on-quarter and 1% on a year ago.
- Gross buy-to-let totalled £8.4bn, down 6% on Q1 but up 5% on Q2 2016. This equated to 55,400 loans, down 6% on the previous quarter but up 5% year-on-year.
Paul Smee, Head of Mortgages at UK Finance, said ” June’s figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers. Buy-to-let activity remains subdued compared to its 2015 peak but consistent month-to-month since stamp duty changes in April 2016. But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017. A slightly lop-sided market could well show some growth in house purchase lending but alongside reduced remortgage and buy-to-let activity.”
On a seasonally adjusted basis, lending to first-time buyers and home movers remained relatively unchanged month-on-month, but there were year-on-year increases by volume and by value. Buy-to-let and remortgage activity remained relatively unchanged in June from May. (The full seasonally and non-seasonally adjusted data set 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 June 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 £137,000 in May to £139,000 in June. The average household income increased to £41,000 from £40,500. This meant the income multiple went up from 3.58 to 3.59.
The average amount borrowed by home movers in the UK increased to £180,000 from £177,000 the previous month, while the average home mover household income increased month-on-month from £54,900 to £55,200. The income multiple for the average home mover went up to 3.39 from 3.37.
Chart 1: Number of loans to home-owners, 2007-2017
Source: UK Finance Regulated Mortgage Survey
Buy-to-let lending in June
Buy-to-let activity was driven by remortgage lending which accounted for over two thirds of total lending. Buy-to-let house purchase and remortgage activity in June remained consistent to monthly levels seen since the change on stamp duty on second properties introduced in April last year.
Chart 2: Number of loans for buy-to-let
Source: UK Finance Economics (pre-2013 data based on quarterly data)
Table 1: Number of loans for house purchase and remortgage in June
|1 month change||+22.4%||+24.1%||+9.8%||+4.6%||-0.8%|
|12 month change||+5.6%||+8.6%||+9.8%||+6.2%||+3.3%|
Table 2: Number of loans for house purchase and remortgage in Q2
|1 quarter change||+15.3%||+16.6%||-1.6%||-12.0%||-5.5%|
|1 year change||+6.2%||+13.1%||+23.1%||-0.7%||+0.6%|
Table 3: Value of loans for house purchase and remortgage in June
|House purchase (£m)||Remortgage (£m)|
|1 month change||+25.5%||+25.8%||0.0%||+5.3%||+5.3%|
|12 month change||+9.3%||+14.7%||0.0%||+7.1%||0.0%|
Table 4: Value of loans for house purchase and remortgage in Q2
|1 quarter change||+18.4%||+18.8%||0.0%||-10.6%||-8.2%|
|1 year change||+10.4%||+21.0%||+23.8%||+1.2%||-3.4%|