First-time buyer lending down again in September

Lending to first-time buyers declined for the second month in a row in September according to new figures published by the Council of Mortgage Lenders, which recorded 26,800 first-time buyer loans in September, 3 per cent fewer than in August.

Despite the monthly slide, the year-on-year comparisons still suggest the market is more active than in 2013, with the month 16 per cent up in first-time buyer issuance compared to September last year.

Lending to home movers overall weakened month-on-month as the market continued to show signs of cooling, with the number of loans advanced falling 10 per cent against August to 31,700, though again this was up 11 per cent on September 2013.

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Remortgage lending activity was up in September, with the number of remortgage loans totalling 28,300 and representing a 20 per cent increase on August and, in contrast to wider trends, a 12 per cent slide on an annual basis.

There were 18,100 buy-to-let loans in September, representing lending of £2.5bn. Following the August low of 15,700 loans worth £2.2bn, this returned buy-to-let lending to levels similar to July, up 24 per cent by volume and 32 per cent by value on September last year.

Over the third quarter as a whole there were 84,100 first-time buyer loans, 3 per cent up on the previous quarter and 15 per cent up on last year. At 103,600, there were 12 per cent more home-mover loans in the third quarter than the second and 10 per cent more than Q3 2013.

In Q3, remortgage loans increased by 2 per cent to 77,200 on the previous quarter, but down 13 per cent on the third period of 2013. The number of buy-to-let loans was 12 per cent up on the second quarter and 18 per cent up on Q3 2013.

Paul Smee, director general of the CML, said: “This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges.

“The lending market is healthier than it was a year ago, and set to remain so. Remortgaging has returned as a driver of lending volume in the buy-to-let sector. But any fears of over-heating in the housing market are now dissipating as house purchase lending activity seems to be softening.”