Lending to home buyers jumped by 27 per cent in March as first-time buyer and remortgage activity remained strong.
Home buyers took out 61,700 loans in March, up 27 per cent on February but down 12 per cent on March 2016, according to the latest figures from the Council of Mortgage Lenders (CML).
First-time buyers took out 31,500 loans, an increase of 30 per cent month-on-month, while the number of loans advanced to home movers totalled 30,200 - up 24 per cent month-on-month but down 28 per cent on an annual basis.
Home-owner remortgage activity climbed 13 per cent by value and 14 per cent by volume on February, with year-on-year gains of 22 per cent by value and 24 per cent by volume.
Gross buy-to-let was up 4 per cent by value and 8 per cent by volume, but a surge of activity ahead of April 2016’s stamp duty reform meant the number of loans decreased 58 per cent and the amount borrowed fell by 60 per cent on an annual basis.
Number of loans for house purchase and remortgage in March
| House purchase | Remortgage | ||||
| FTBs | Movers | Buy-to-let | Home owners | Buy-to-let | |
| Mar-16 | 28,100 | 41,900 | 29,100 | 28,700 | 16,100 |
| Feb-17 | 24,200 | 24,400 | 5,700 | 31,100 | 11,700 |
| Mar-17 | 31,500 | 30,200 | 6,500 | 35,500 | 12,300 |
| 1 month change | 30.20% | 23.80% | 0 | 14.10% | 5.10% |
| 12 month change | 12.10% | -27.90% | -77.70% | 23.70% | -23.60% |
Paul Smee, director general of the CML, said: “Comparing this March to last year is misleading because of the peak in activity before the stamp duty changes last spring.
“Overall, lending trends have remained reasonably consistent. The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but in aggregate the market is showing broadly the levels of activity we expected.
“As we head into the summer, we expect a continuation of these trends, with both first-time buyer and remortgage lending expected to maintain momentum in the light of the very attractive deals currently available.”
Jeremy Duncombe, director, Legal & General Mortgage Club, said clearly despite the ever-changing political landscape, demand for lending, particularly to first-time buyers, remains strong.
He said: "It is encouraging to see a growing number of borrowers taking control of the mortgage market by reaping the financial rewards of our current and historically low mortgage rates.
“With the general election on the horizon, building affordable homes needs to be a top priority for all political parties.
"Until supply is realigned with demand, house price inflation will continue to rise which has a knock-on effect for first time buyers trying to save up for a home of their own.
“Whatever the outcome of the vote next month, we need to see significant investment in the property sector to help build affordable housing across all tenures.”
Jonathan Harris, director of mortgage broker Anderson Harris, said the reason first-time buyer numbers are continuing to grow is because the Bank of Mum and Dad has been stepping up to the plate, while lenders also offer competitive pricing at higher loan-to-values.
He said: "Remortgaging remains popular as borrowers take advantage of cheap mortgage deals and lenders’ willingness to attract new business. This trend is expected to continue well into the summer."
simon.allin@ft.com
