Home purchase lending up 1% in December –CML
House purchase lending to home buyers increased slightly by one per cent month on month in December but compared to December 2013, the number of loans fell by five per cent, according to the latest CML data.
However, the figures from the Council of Mortgage Lenders also show that first time buyers saw a month on month lending increase, up three per cent on November, but still three per cent down on December 2013.
According to Propertywire.com, by value, £3.8bn was advanced to first time buyers in December, six per cent up on November but unchanged compared to December 2013 while the number of loans advanced to home movers was 29,500, the same as November but down eight per cent on December 2013.
By value, lending to movers totalled £5.5bn, up two per cent in November but two per cent down in December 2013.
Remortgage lending activity also saw a decline with the number of remortgage loans seven per cent down on November and 13 per cent down on December 2013. The value of these loans at £3.4bn was down six per cent on the previous month and down 11 per cent on December the previous year.
Buy to let loans totalled 17,300 in December, unchanged from November but up 18 per cent compared to December 2013. The total value of these loans at £2.5bn was up four per cent month on month and up 32 per cent compared to December 2013.
On a quarterly basis home owner house purchase lending fell five per cent and was down three per cent compared to the fourth quarter of 2013. The value of these loans at £28.8bn declined compared to the third quarter by eight per cent but was up two per cent compared to the same period in 2013.
First time buyers in the fourth quarter of 2014 saw minimal change compared to the previous quarter and the same quarter in 2013. There were 80,100 loans advanced to first time buyers in this period, down two per cent on the third quarter and unchanged compared to the fourth quarter of 2013. The value of these loans totalled £11.6bn, which was down five per cent on the third quarter but five per cent up on the fourth quarter of 2013.
Home movers were advanced 93,100 loans in the fourth quarter, a decline of eight per cent compared to the third quarter and five per cent down year on year. These loans totalled £17.2bn in value, 10 per cent down on the previous quarter, but unchanged compared to the fourth quarter of 2013.
Remortgage lending declined this quarter with 73,100 loans advanced, down three per cent on the third quarter and 13 per cent down on the fourth quarter 2013. The value of these loans at £11.1bn declined four per cent quarter on quarter and 10 per cent year on year compared to the fourth quarter 2013.
Buy to let loans totalled 54,000 in the fourth quarter of 2014, up four per cent on the previous quarter and up 16 per cent on the same period in 2013. This totalled in value £7.7bn, an increase of five per cent on the third quarter and up 26 per cent on the fourth quarter 2013.
Overall for 2014, home owner house purchase totalled 676,900 loans, up 11 per cent on 2013 and the highest annual lending level since 2007. This meant £112.7bn was advanced in total in 2014 for house purchase, up 19 per cent on 2013 and again the highest annual value since 2007.
Director-General of the CML, Paul Smee, said, “Improving economic conditions, boosted by government schemes like Help to Buy, saw the highest amount of first time buyers purchase their first home for seven years. The growth seen through 2013 and the beginning of 2014 in mortgage lending have softened in the last quarter, and we’d expect this steadying of the market to continue in 2015.
“In 2014, the mortgage market saw unprecedented change with the introduction of major regulatory reform but the market has adjusted and kept its stability throughout. There will be challenges in 2015, including preparation work on the European Directive implementation and a General Election potentially bringing new housing policies to be put in place. But the industry is stronger than a year ago and ready to meet the challenges going forward.”
According to the Chairman of Platinum Property Partners, Steve Bolton, the figures confirm that buy to let currently offers an investment opportunity with tangible capital growth and further growth in the buy to let sector is expected in 2015.
