CML: optimum mortgage affordability seen in September

Posted on Thursday, November 24 by Joy Tibbs

Homeowners borrowed £11.4 billion for house purchase in September, down 7% month-on-month but up 4% year-on-year. Homeowners took out 62,900 loans, down 5% on August but up 3% on September 2015.

Remortgage activity totalled £5.5 billion, down 7% compared with August but up 8% compared with September 2015. This came to 31,500 loans, down 10% month-on-month but up 2% compared with the same month last year.

First-time buyers borrowed £4.9 billion, down 4% on August but up 14% on September 2015. This equated to 31,500 loans, down 1% month-on-month but up 13% year-on-year.

Home movers borrowed £6.5 billion, down 9% on a month ago and 3% compared with a year ago. This represented 31,400 loans, down 8% month-on-month and 5% on September 2015.

Landlords borrowed £2.8 billion, down 7% month-on-month and 22% year-on-year. This came to 18,200 loans in total, down 6% compared with August and 26% compared with September 2015.

Third-quarter remortgage activity totalled £17.5 billion, up 5% on the second quarter and 22% on the same quarter a year ago. This came to 100,100 loans, up 3% quarter-on-quarter and 16% year-on-year.

Paul Smee, director general of the CML, said: “House purchase activity appears to have steadied. We may not be seeing huge increases in activity on the scale of 2013-14 but there is a consistency in the levels in recent months.

“Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the repricing of mortgages following August’s base rate cut. This should help turn strong appetite for homeownership into a reality as we approach the closing months of the year. 

“Six months on since the stamp duty changes on second properties and buy-to-let continues to operate at lower levels than a year ago. But lending for buy-to-let house purchase and remortgaging has settled at its current level over the last four months.”

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