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koala_bear

Cml July Data

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http://www.cml.org.uk/cml/media/press/3666

Note data no includes BTL so time series may need treating with caution. At least this gives us a better monthly view of BTL on a comparable basis.

Gross UK mortgage lending rose 12% in July to £16.7 billion, up from £14.9 billion in June and 29% on last July. Survey results published by the Council of Mortgage Lenders today show that this growth in July continued to be buoyed by home-owner house purchase lending, in particular by growth in first-time buyers.

The CML data (which, as of this month, includes buy-to-let) shows:

  • Total home-owner house purchase lending continued to grow, up 9% on June and 21% on July last year.
  • First-time buyers took out 25,300 loans in July, an increase of 5% on June and of 41% compared to July 2012.
  • Home movers took out 32,000 loans, an increase of 12% compared to June and up 9% on July last year.
  • Home-owner remortgage lending continued to pick up compared to July 2012 and recent months, although the £3.8bn advanced remains subdued compared to historical volumes.
  • Total buy-to-let loans advanced increased to 15,200 in July, up 12% compared to June.
  • Within this, 7,600 buy-to-let loans in July were for house purchase, up by 7% compared to June.
  • In contrast to the picture in the home-owner market, buy-to-let remortgage lending grew more strongly than house purchase, increasing by 24% compared to June to £1.1bn.

Lending for home-owner house purchase

Total home-owner house purchase loans (both movers and first-time buyers) continued to show the resilience and growth seen throughout 2013. 57,400 house purchase loans were advanced in July, an increase of 9% on June and up by 21% on July last year. These loans had a total value of £9.1bn, which was an increase of 12% on June and 23% compared to July last year.

Table 1: Loans for house purchase and remortgage

Number of house

purchase loans Value of house

purchase loans, £m Number of

remortgage loans Value of remortgage

loans, £m July

2013 57,400 9,100 27,000 3,800 Change from

June 2013 8.9% 12.3% 5.5% 8.6% Change from

July 2012 21.1% 23.0% 7.6% 15.2%

Lending to first-time buyers

The strong growth in lending to first-time buyers since the beginning of the year has continued, with the number of loans advanced increasing by 5% compared to June. In July, 25,300 loans were advanced to first-time buyers, worth £3.5bn. By value, first-time buyer lending was 6% up on June and 46% up on July last year.

The typical first-time buyer loan size stayed almost unchanged from June at £117,038, while average first-time buyer household income increased to £36,142 from £35,873 in June.

Affordability improved marginally in July compared to June reflecting the average loan size remaining largely unchanged but a higher income average, alongside a further fall in typical interest rates. Typically, first-time buyers in July borrowed 3.31 times their income in comparison to 3.33 in June and mortgage payments (capital and interest) accounted for 19.2% of income, down from 19.3% in June.

Table 2: First-time buyers, lending and affordability

Number of loans Value of loans £m Average loan to value Average income multiple Proportion of income spent on interest payments Proportion of income spent on capital and interest payments July

2013 25,300 3,500 82% 3.31 11.8% 19.2% Change from

June 2013 5.4% 6.1% 80% 3.33 12.1% 19.3% Change from

July 2012 40.6% 45.8% 81% 3.24 13.7% 20.0%

Lending to home movers

Lending to home movers showed strong growth in July, with 32,000 loans advanced - up by 12% compared to June and 9% compared to July last year. By value, movers borrowed £5.6bn, an increase of 17% compared to June and 12% compared to July last year.

The percentage of income spent on mortgage payments by home movers remained relatively similar to June 2013, increasing from 18.2% to 18.3% in July. However, this was a decrease in comparison to July 2012 when it was 19.3%.

Table 3: Home movers, lending and affordability

Number of loans Value of loans £m Average loan to value Average income multiple Proportion of income spent on interest payments Proportion of income spent on capital and interest payments July

2013 32,000 5,600 70% 2.92 8.8% 18.3% Change from

June 2013 11.9% 16.7% 70% 2.91 9.0% 18.2% Change from

July 2012 9.2% 12.0% 69% 2.89 10.2% 19.3%

Lending to home owners for remortgage

Lending to home-owners for remortgage increased by 9% in July compared to June but still remains subdued compared to historical volumes. In total, £3.8bn was advanced in July to home-owners for remortgages which represented a 9% increase in value on June and a 15% increase on July last year.

Remortgage activity reported by CML is likely to increase in the coming months - Bank of England approvals data showed a 40% increase in July.

Lending for buy-to-let

Lending for buy-to-let has continued to follow an upward trend, similar to the market overall. 15,200 buy-to-let loans were advanced in July, an increase of 12% compared to June. This represents a value of £2bn which was 11% higher than in June.

Lending for buy-to-let house purchase was up 7% in July compared to June, a total of 7,600 loans. The value of these loans was £900m, up 13% from June.

Table 4: Loans for buy-to-let house purchase and remortgage

Number of BTL house

purchase loans Value of BTL house

purchase loans, £m Number of BTL

remortgage loans Value of BTL remortgage

loans, £m July

2013 7,600 900 7,200 1,100 Change from

June 2013 6.7% 12.5% 13.4% 23.6%

Lending for buy-to-let remortgage

There was strong growth in buy-to-let remortgage lending which increased by 24% in July compared to June, a value of £1.1bn. This equated to 7,200 loans in July for buy-to-let remortgage in total, an increase by 13.4% on June 2013.

Paul Smee, director general of the CML, commented:

"The notable feature is the catch-up in home mover activity. For only the second time this year the monthly growth of movers exceeded the growth in first-time buyers. This is a positive sign of a mortgage market where obstacles to transactions are now reducing."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey for all home-owner mortgage data. Buy-to-let data is sourced from a sample of CML members and has been grossed to estimate the industry total. The CML began collecting monthly data in January 2013 and will from now on report monthly buy-to-let data in this press releases, alongside our home owner house purchase data.

Buy-to-let gross advances

Period Month Gross advances in period Gross advances in period House purchase House purchase Remortgage Remortgage Other Other number £m number £m number £m number £m 2013 Jan 12,000 1,500 6,330 690 5,540 710 150 20 Feb 10,800 1,300 5,730 610 4,890 630 130 20 Mar 10,700 1,400 5,670 600 4,930 660 130 20 Apr 11,700 1,500 5,850 650 5,720 780 170 30 May 14,600 1,800 7,460 840 6,940 930 210 30 Jun 13,600 1,800 7,120 800 6,350 890 190 30 Jul 15,200 2,000 7,600 900 7,200 1,100 350 30

Also

http://www.bbc.co.uk/news/business-24060663

First-time buyer loans up by 41%, CML says

Various surveys have shown that the housing market is showing signs of more activity

The number of mortgages advanced to first-time buyers in July increased by 41% compared with a year ago, but the numbers remain well below peak levels.

Some 25,300 loans were advanced to people buying their first home in July, figures from the Council of Mortgage Lenders (CML) show.

But that is still about 10,000 fewer than pre-financial crisis levels.

Much debate about the future of the UK housing market and the potential for a price bubble has been heard this week.

Mortgage availability There was an increase of 5% in the number of loans advanced to first-time buyers compared with June. Borrowers had an average age of 30.

These buyers were taking a "measured approach" to buying property, according to Mark Harris, chief executive of mortgage broker SPF Private Clients, because they were generally borrowing about the same multiple of their salary as buyers during previous months.

The CML's director general, Paul Smee, said that signs of a greater availability of mortgages were clear from a speedier recent increase in loans advanced to people moving house.

The 32,000 loans advanced in July was a rise of 12% compared with June, and up 9% on July last year.

"This is a positive sign of a mortgage market where obstacles to transactions are now reducing," Mr Smee said.

Total mortgage lending rose to £16.7bn in July, up 12% on the previous month and 29% higher than last July, the CML said.

Bubble ahead? Various government and Bank of England schemes aimed at kick-starting the property market have been key to the recent pick-up, commentators have said, alongside general improvements in the health of the UK economy.

Help to Buy is a government scheme initially aimed at assisting people to buy newly-built homes However, concerns have been raised that the government's flagship Help to Buy scheme could create a bubble in the housing market.

The scheme, which began in April, allows buyers of new-build homes to put down a 5% deposit and take out a government loan for up to 20% of the value of the property.

From January, the scheme will be extended to help buyers of existing homes.

On Thursday, Business Secretary Vince Cable questioned whether the second part of this scheme should go ahead.

But Downing Street has insisted that the government would press ahead with the idea.

Others have expressed concern over the housing market.

The chief executive of Barclays, Antony Jenkins, said he was concerned about the potential for a "property-driven boom" in the UK and although the Bank of England was monitoring the state of the market carefully, "these things can be difficult to control".

But the CML said that talk of a housing boom was "premature".

"The UK property market is actually a complex and dynamic patchwork of regional and local conditions," the lenders' group said.

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Thanks, kb. Seems like remortgaging has picked up significantly but this isn't yet reflected in the gross figures.

Home-owners taking fright at the prospect of rising rates, perhaps?

Lending to home-owners for remortgage increased by 9% in July compared to June but still remains subdued compared to historical volumes. In total, £3.8bn was advanced in July to home-owners for remortgages which represented a 9% increase in value on June and a 15% increase on July last year.

Remortgage activity reported by CML is likely to increase in the coming months - Bank of England approvals data showed a 40% increase in July.

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A little number crunching:

Avg. FTB mortgage amount: £138.7k

Avg. mover mortgage amount: £175.0k

Avg. re-mortgage amount: £140.7k

Avg. BTL purchase mortgage amount: £118.4k

Avg. BTL re-mortgage amount: £152.8k

Thoughts:

New BTL lending obviously focused on 1 or 2 bed flats (as per other threads especially TMW lending?) as the sums involved are much less than BTL remortgage amounts.

Caution needs to be used when comparing OO and BTL as BTL has lower maximium LTV.

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Thanks, kb. Seems like remortgaging has picked up significantly but this isn't yet reflected in the gross figures.

Home-owners taking fright at the prospect of rising rates, perhaps?

A number of factors behind this I think, future IR rises being one.

For example - It may be harder to re-mortgage after the end of new FLS lending (or more indirectly HTB1 or 2 for that matter that also pump money into the system) so re-mortgage now when it is potentially easier.

In order to re-mortgage advantageously they may have had to have more equity either via increased home valuation or saving up more so they could improve the LTV.

Re-mortgage before all the mortgage market review requirements are enforced?

At least 6-8 week lag on agreements vs actual lending. I also suspect a fair number are falling through so may be they are agreeing to advance more knowing it won't happen.

Edited by koala_bear

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