The latest data from the Council of Mortgage Lenders (CML) shows that the number of mortgages for April 2017 are up from this time last year. This is a relief for Britons because the market has gone through the ringer with the implementation of stamp duty and a tumultuous political climate over the past year. However, the fact that momentum is being kept up on the lending side of things shows that buyer demand remains prevalent within the market.
The CML revealed that the number of loans for first-time buyers (FTB) is up +2% and their borrowing is up +8% year-on-year. The number of loans given out to FTBs for April 2017 is 25,400, up from 24,800 in April 2016. In addition, larger loans are being given out to this group than the same time last year, up +7.9%.
Although, April’s numbers are just short of the ones in March, this is an optimistic sign that FTB are continuing in their endeavor to get on the property ladder. The average FTB is 30 years old and is acquiring an average loan size of £136,500. They are also contributing 17.3% of their monthly gross household income to their mortgage repayments.
The findings for home movers paint a similar picture as over the past year, the borrowing pattern of home movers has jumped +28% and the number of loans given out is up +17% to 25,700.
The average home mover in the UK is aged 39 years and borrowed an average of £176,500 in the month of April 2017, up from £172,400 for the month of March 2017. This is likely linked to the marginal increase in household income among this group on the previous month from £54,100 to £55,200 – an income multiple of 3.35. Similarly to March, the average home mover gives +17.5% of their gross monthly household income to mortgage and interest payments.
For the month of April, £9.6bn was borrowed by homeowners, including FTBs and home movers, which is a +19% increase since the same time last year. The number of loans hit 51,200 and equated a +9% jump since April 2016.
Despite the numbers showing a slight drop since March, April’s figures remain strong and are an improvement on last year. There have been several factors that have contributed to a turbulent market in the past year, but it is likely that a more stable market is on the horizon.
These figures are a promising sign for the UK property market and demonstrate the durability of the sector over the last year, with lending figures up annually despite the turbulence of the Brexit vote and the following uncertainty.
With the addition of the snap election called in April, buyers have understandably been a tad stand offish with their property transaction until the dust has settled, and so it is no wonder there has been a slight cooling in lending figures month on month. It is likely these figures will see a spike as more buyers return to the market once the political future of the nation has been confirmed.Russell Quirk