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."

Join our mailing list:

Leave a comment



Our Next Event

Commercial Finance Roadshow May 2017

Commercial Finance Roadshow May 2017

Exeter - 23/05/2017

Southampton - 24/05/2017

Rainham - 25/05/2017

Milton Keynes - 26/05/2017

Register now

Latest Comments

warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

view article
Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

view article
Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

view article
MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

view article
bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

view article
Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

view article
jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

view article
SecomTech
SecomTech 04 Apr 2017

...and not one mention of the rules on PERMITTED DEVELOPMENT!!! Unless you have studied the plans you will not know...It's probable a high proportion would not need planning permission...BUILDING Control...

view article
Jonathan
Jonathan 03 Apr 2017

That's a very interesting study indeed. There is no doubt that new services and web apps such as Wonego.com in the UK or Roomster in the US will change the way people look for a flatmate, and that tenants...

view article
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'...

view article
ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

view article
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...

view article

Related stories

More articles from Finance