Latest UK Finance data shows that lending for house purchase was higher in August 2017 than in both the preceding month and a year earlier. Latest highlights include:
  • First-time buyers borrowed £5 billion, 15% lower than in June but 14% higher than in July 2016.  They took out 30,400 mortgages, down 16% on the preceding month but up 8% year-on-year.
  • Home movers borrowed £7.1 billion, 9% less than in June but 15% more than in July last year.  This equated to 32,800 loans, down 10% on June but up 10% on July 2016.
  • Remortgaging by home owners totalled £6.7 billion, 12% more than in both the preceding month and in July last year.  The number of people remortgaging totalled 36,800, up 7% on June and 10% higher than a year ago.
  • Buy-to-let lending totalled £3.2 billion, 7% higher than in June and 7% higher than in July last year.  This equated to 20,500 mortgages, 5% more than in June and 9% more than in July last year.

Commenting on the data, UK Finance’s Head of Mortgages Policy June Deasy said “Activity picked up in August, and recent resilience ensured that borrowing by home movers was at its highest since March 2016, when transactions were boosted by an imminent increase in stamp duty. Over the last 12 months, the number of people remortgaging has been higher than in any period since late 2009. With mortgage rates close to historic lows and the likelihood of a rise in official rates moving closer, the popularity of remortgaging looks set to continue.”

On a seasonally adjusted basis, borrowing by first-time buyers and movers increased by both value and volume. There was a decline in both the number of people remortgaging and the value of lending. The value of buy-to-let lending was unchanged but there was a small decrease in the number of buy-to-let borrowers remortgaging. (The full seasonally and non-seasonally adjusted data can be downloaded at the bottom of the page.)

The proportion of household income taken up by mortgage payments edged up for first-time buyers (17.5 per cent) but was unchanged for movers (17.6 per cent). Overall, it remains low by historical standards.

The average amount borrowed by a first-time buyer increased from £138,999 in July 2017 to £140,035. There was a smaller proportionate increase in the average first-time buyer household income, and the average income multiple increased from 3.60 to 3.63. The average amount borrowed by movers increased from £180,000 to £182,750, and their average income multiple increased from 3.38 to 3.40.

Chart 1: Number of loans to home owners, 2007-17

chart 1 aug 17

Source: UK Finance regulated mortgage survey

Buy-to-let lending in August

Remortgaging accounted for more than two-thirds (68 per cent) of buy-to-let lending in August. Buy-to-let remortgaging was five per cent lower than in July, but borrowing for house purchase increased by 11 per cent. Overall, however, borrowing for house purchase by buy-to-let landlords remains at a lower level than before the introduction of the higher stamp duty rate in the spring of 2016.

Chart 2: Number of loans for buy-to-let

chart 2 aug 17

Source: UK Finance Economics (pre-2013 data based on quarterly data)

Table 1 –  Number of loans for house purchase and remortgage

House purchase Remortgage
FTBs Movers Buy-to-let Home owners Buy-to-let
August 2016

31,600

34,100

6,500

35,000

12,900

July 2017

30,300

32,900

6,400

37,100

13,700

August 2017

34,400

38,500

6,800

36,700

13,100

1-month change

13.5%

17.0%

6.3%

-1.1%

-4.4%

12-month change

8.9%

12.9%

4.6%

4.9%

1.6%

Table 2 – Value of loans for house purchase and remortgage

House purchase Remortgage
FTBs Movers Buy-to-let Home owners Buy-to-let
August 2016

5,100

7,000

1,000

5,900

2,100

July 2017

4,900

7,100

900

6,700

2,200

August 2017

5,700

8,400

1,000

6,400

2,100

1-month change

16.3%

18.3%

11.1%

-4.5%

-4.5%

12-month change

11.8%

20.0%

0.0%

8.5%

0.0%

Table 3 – First-time buyer affordability measures

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of income

August 2016

136,500

40,996

85.0%

3.56

9.3%

18.0%

July 2017

138,999

40,995

85.0%

3.60

8.3%

17.4%

August 2017

140,035

41,254

85.0%

3.63

8.2%

17.5%

Table 4 – Home-mover affordability measures

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of income

August 2016

175,000

55,457

71.2%

3.27

7.1%

17.9%

July 2017

180,000

55,825

72.2%

3.38

6.5%

17.6%

August 2017

182,750

56,087

72.0%

3.40

6.4%

17.6%

Table 4 – Home-mover affordability measures

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of income

August 2016

175,000

55,457

71.2%

3.27

7.1%

17.9%

July 2017

180,000

55,825

72.2%

3.38

6.5%

17.6%

August 2017

182,750

56,087

72.0%

3.40

6.4%

17.6%

 

Affordability infographics

UKF_FirsttimebuyeraffordabilityintheUK_Aug017

UKF_Home movers affordability in the UK_Aug2017