UK Finance: First-time buyer activity continues to grow in June
|
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...Request free trial
On a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in June rose:
On a non-seasonally adjusted basis, UK Finance shows that mortgage lending in the second quarter also rose:
Paul Smee, Head of Mortgages at UK Finance, commented:
“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."
Home-owner house purchase and remortgage lending in June
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 is attached to this email.]
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 with 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
Table 2: Number of loans for house purchase and remortgage in Q2
Table 3: Value of loans for house purchase and remortgage in June
Table 4: Value of loans for house purchase and remortgage in Q2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||