The Council of Mortgage Lenders (CML) has published its latest mortgaging figures. While first-time buyer lending was down in July compared to June, the number of loans advanced to first-time buyers was the second highest monthly level of the year so far. Home mover activity was at its third highest monthly level this year by volume and by value in July, after March and June. On a seasonally adjusted basis, first-time buyers and home movers decreased by volume 13% and 7% respectively in July compared to June, but the number of loans to first-time buyers increased 8% compared to July last year, while the number of loans to home movers decreased 7% year-on-year.
Affordability metrics for first-time buyers have remained relatively stable. The typical loan size decreased to £133,000 in July from £135,700 in June, while the average household income of borrowers purchasing their first home also decreased slightly from £40,400 in June to £40,100 in July, which meant the income multiple was unchanged at 3.55.The average amount borrowed by home movers in the UK increased to £171,400 in July from £171,000 in June, and the average household income of a home mover also increased to £55,000 from £54,700. This meant the income multiple went up from 3.26 to 3.29 month-on-month.Remortgage lending saw a month-on-month and year-on-year growth in July. £6bn was borrowed in total in the month for remortgage which, alongside April 2016, is the highest monthly amount borrowed for remortgage since January 2009.
Paul Smee, director general of the CML, said “These figures cover the first full month of lending following the EU referendum. They show a month-on-month decline in first-time buyer and home mover activity and muted activity on the BTL market. It is hard to determine whether these figures reflect a first uncertain reaction to the referendum vote, or are a sign of a market which was already cooling. It will be quite some time before a full assessment can be made. We do believe that the Buy-to-let lending market is still readjusting after the large level of activity before the changes to stamp duty on second properties in April.Remortgage lending on the other hand has continued to grow, and reacted with a 7-year monthly high. Borrowers seem keen to take advantage of the wide range of competitive deals in the market and, following the base rate cut in August, this is likely to continue.”