The Council of Mortgage Lenders (CML) has published it’s latest research identifying underlying mortgage lending trends. Paul Smee, director general of the CML, said “House purchase activity appears to have steadied, we may not be seeing huge increases in activity on the scale of 2013-14 but there is a consistency in the levels in recent months. Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the re-pricing of mortgages following August’s base rate cut. This should help turn strong appetite for home-ownership into a reality as we approach the closing months of the year.

“Six months on since the stamp duty changes on second properties and buy-to-let continues to operate at lower levels than a year ago. But lending for buy-to-let house purchase and remortgaging has settled at its current level over the last four months.”

The amount borrowers are paying as a percentage of their household income to service capital and interest rates reached a historic low this month for both first-time buyers and home movers, 17.8% and 17.7% respectively. Affordability metrics for first-time buyers saw the typical loan size decrease to £133,000 in September from £136,400 in August. The average household income also decreased slightly from £41,000 in August to £40,200 in September. This meant the income multiple was slightly down from 3.56 to 3.53.

The average amount borrowed by home movers in the UK also decreased to £171,000 in September from £175,000 in August, while the average home mover household income also decreased to £55,100 from £55,400. The income multiple for the average home mover went from 3.27 to 3.26 month-on-month. While there was a decline in house purchase lending in September compared to a month before, this is the highest volume of loans and most amount borrowed in the month of September since September 2007.This was mirrored in first-time buyer trends as this was the highest volume of loans in the month of September since September 2006. On a seasonally adjusted basis, most lending trends were relatively similar. However, first-time buyer loans by value increased both month-on-month and year-on-year. Home movers saw an increase by value compared to August.

Remortgage loans saw a decline month-on-month but an increase year-on-year in September. On a quarterly basis, there were more loans advanced for remortgage than any quarter since the third quarter of 2011.