House purchases fall to lowest levels since 2015

House purchases fall to lowest levels since 2015
Today’s figures continue to build on the precedent set in 2016

According to the latest data from CML, the number of loans advanced for house purchases during January fell to its lowest monthly level since February 2015.

However, remortgage activity continued to rise - up 54% by value and 46% by volume on December. Further analysis revealed that home buyers borrowed £8.4bn in January, down 28% on December and unchanged on January 2016. By contrast, compared to January 2016, remortgage lending was up 22% by value and 21% by volume.

Gross buy-to-let also saw month-on-month increases, up 11% by value and 12% by volume. However compared to 2016 both the number of loans and the amount borrowed decreased by 16%.    

On a seasonally adjusted basis, the month-on-month change in first-time buyer and home mover activity was minimal. First-time buyer lending increased 2% by value with the number of loans down 2% compared to December.

The number of home mover loans remained unchanged month-on-month and the total amount borrowed increased by 3%, while year-on-year activity decreased slightly by value and by volume.


Paul Smee, director general of the CML, commented: "January gives the impression of a flattish market overall, albeit one with a resurgent remortgage sector. We expect a seasonal dip in activity in the winter months and this appears to be the case in January. However, the lull in moving activity appears stubbornly persistent, and we have commissioned research on the reasons why the number of transactions seems in secular decline.

Buy-to-let house purchase activity continues to be weak, despite strong buy-to-let remortgage levels. This will likely remain so going forward as lenders tighten affordability criteria ahead of the PRA mandated stress tests, and the introduction of tax changes in April."

Jeremy Duncombe, Director, Legal & General Mortgage Club, added: “Today’s figures continue to build on the precedent set in 2016. The buzz of activity around remortgaging continues, as practical homeowners seize the opportunity to potentially save themselves around £2,000 a year by switching their existing mortgage deal.

At a first glance, today’s figures paint a positive picture of our housing market, highlighting the strength and robustness of this vital sector. However, it also highlights the higher sums that first time buyers are borrowing to get themselves onto the housing ladder due to the ongoing disparity between house price inflation and wage inflation."

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "While there is little change month-on-month, the figures are encouraging because they demonstrate market resilience - which is what we are seeing at the coalface. Encouragingly, we have noticed a bit of a pick-up in activity over the past few weeks as buyers and sellers seem to be getting on with it as they usually do at this time of year.

Listings are improving but property must still be very compelling in terms of price, location and presentation - or all three - in order to gain attention from increasingly discerning buyers."

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Remortgaging remains hugely popular as borrowers take advantage of rock-bottom rates. Lenders are keen to lend and this appetite shows no signs of diminishing.

The dip in activity over the winter months explains why January tends to be a relatively quiet month for the mortgage market. These numbers should pick up as we move into spring, as this is usually a busier time of the year for the housing market."

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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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