Home movers and first-time buyers dominated mortgage lending in November 2016, while remortgages made buy-to-let look better than it is, Council of Mortgages Lenders figures show.
Lending to home owners increased 5% between October and November to £11bn, up 2% year-on-year. They took out 60,800 loans, up 5% on October and up 0.2% on November 2015.
First-time buyers borrowed £4.7bn, up 4% on October and 9% on November last year. This equated to 30,100 loans, up 5% month-on-month and 8% year-on-year, according to the CML.
Meanwhile, home movers borrowed £6.3bn, up 7% on a month ago but down 5% compared to a year ago. This represented 30,700 loans, up 6% month-on-month but down 6% on November 2015.
Landlords borrowed £3.2bn, up 10% month-on-month but down 9% year-on-year, coming to 21,000 loans in total, up 13% compared to October but down 10% compared to November 2015.
This made it look like buy-to-let loans have returned to times before the Stamp Duty rush when there were 23,500 loans in March 2016 and 21,900 in April 2016 before dropping to around 18,00 each month for the rest of the year. But the latest figures are slightly skewed by remortgages as these type of loans actually make up 14,000 of the 21,000 lent on buy-to-let. The number of new buy-to-let loans has actually been pretty flat at 34,700.
Remortgage activity was down 5% on the month to £5.8bn, which is still up 14% compared to a year ago. This came to 34,700 loans, unchanged month-on-month but up 13% compared to a year ago.
The CML data also showed the proportion of household income used to service capital and interest rates reached another historic low this month for both first-time buyers and home movers at 17.5%.
Paul Smee, director general of the CML, said: “November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change and aspirations for home-ownership remain strong in the UK. Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but we still predict 1.2m transactions and a slight increase in gross lending to £248bn.
“Buy-to-let lending, driven by remortgage activity, saw its strongest monthly lending level since the Stamp Duty changes on second properties introduced last April. Despite this, we expect buy-to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peak as further tax changes take effect.”