Gross lending declined during April, according to latest figures released by the Council of Mortgage Lenders (CML).
The report indicates that lending now totals £15.8bn, down from the £16.1bn recorded in March and 16.8bn in April last year.
Despite purchase lending remaining steady from the month to March, there was a significant fall from a year ago. This was due to a decline in both first-time buyers and home movers.
However, first-time buyer loans have increased during the last twelve months, although income has increased at a quicker rate relative to loan sizes. This has meant a decline in the average loan-to-income ratio. What’s more, loan-to-value ratios have also slipped in comparison to a year ago, from 84% to 82.1%.
With the mortgage war in full swing, first-time buyers are paying less to service their mortgages as has ever been recorded since the CML tracking began in 2005.
Average home mover loans decreased during April in comparison to March, but were up on the same period last year. Average income also increased in April, with loan-to-income decreasing month-on-month and year-on-year as a result. In addition, remortgaging activity from homeowners was down both monthly and annually.
Buy-to-let lending levels in April were down on March’s levels but were up year-on-year. This can be attributed to the rising levels of remortgage activity experienced in the sector since the turn of the year.
April sees 10% dip in house purchase lending
Over the last twelve months, nearly 30% of lending to homeowners was for remortgaging, rising to 52% in the buy-to-let market.
Paul Smee, director general of the CML, stated, ‘house purchasing in April was relatively subdued compared to last year, but similar to activity in March.’ He feels that the, ‘economy is recovering, with employment up, earnings growing and competitive mortgage rates, so we expect activity to continue building as the year progresses.’
‘Buy-to-let is showing stronger growth than home-owner lending, buoyed significantly by remortgaging, which continues to remain more subdued in the home-owner market.’