FTB borrowing at highest levels since records began

FTB borrowing at highest levels since records began
2016 could have been a potentially destabilising year of regulatory and political change, but the mortgage market has been resilient and adaptable

The latest report from The Council of Mortgage Lenders shows that first-time buyers borrowed more during 2016 than any other year since 1974.

According to the report, first-time buyers borrowed £53.2bn for home-owner house purchase in 2016, up 13% on 2015.

On a monthly basis, first-time buyers borrowed £5.1bn for home-owner house purchase in December, up 9% on November and 13% on December 2015.

Remortgage activity was also strong in 2016 - up 14% by volume and 20% by value compared to 2015 to hit its highest level since 2009. On a monthly basis, remortgage activity was down 21% by volume and by value compared to November.

Gross buy-to-let lending also saw month-on-month decreases, down 15% by volume and 7% by value.

Of the three quarters after the stamp duty changes in April, gross quarterly lending was its highest by volume and by value in the final quarter of 2016. Nearly two thirds of buy-to-let loans were remortgages rather than house purchase.   

Paul Smee, director general of the CML, commented: "2016 could have been a potentially destabilising year of regulatory and political change, but the mortgage market has been resilient and adaptable. Home-owner house purchase lending increased, though the buy-to-let sector's positive lending performance has been driven primarily by remortgaging. We do not expect the market volumes to show a year-on-year increase in 2017, instead it will remain similar to that achieved in 2016."

John Phillips, SpicerHaart and Just Mortgages group operations director, had this to say: “Whilst first-time-buyers and remortgage activity kept the market afloat last year, the number of people moving house was consistently down. This is unlikely to change in the foreseeable future as certain barriers, especially towards lending in to retirement, have the effect of holding up the market.
 
Of course we have the age old problem of supply.  Until housing supply is sorted out we will continue to see more families living in property that is unsuitable for their needs.”


Jonathan Sealey, CEO at Hope Capital, commented: “Despite everything the housing market last year defied expectations. Although we are still below pre-crisis levels, to show any kind of increase in a such an unpredictable year gives hope for 2017.  
 
For the time being interest rates look set to remain low and there are plenty of great deals to entice borrowers.  Supply is the constant problem, and we will have to wait and see how the government’s plans to ‘fix the housing market’ are actually implemented.”
 
Jeremy Leaf, former RICS residential chairman, added: "These figures are particularly interesting on two counts and not least because they bear out with what we have been seeing on the high street. In other words, the housing market demonstrated a fair degree of resilience in the period leading up to the end of 2016 and more significantly perhaps first-time buyers seem to have taken the place of buy-to-let investors in some places, as the latter suffer from more taxes and regulation.

These results represent good news for the government whose medicine may finally be working in their attempts to level the playing field between those trying to get onto the ladder and those very much on it."

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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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