Residential lending up in 2017 as BTL cools: UK Finance

Mortgage lending to first-time buyers hit a decade high last year, despite the market cooling in December.

However figures published by UK Finance show that there has been a sharp decline in buy-to-let lending over this period.

Figures for December 2017 show that mortgage lending to first-time buyers, home movers and buy-to-let investors all fell on a month-by-month basis.

But despite this slowdown, during 2017 there were 365,000 first-time buyers in the housing market – the highest number since 2006. This is an 7.4 per cent increase on the numbers seen in 2016.

These UK Finance figures show that the average first-time buyer is now aged 30, and has an income of £41,000.

Lending figures for December 2017, show that there were just 30,8000 new first-time buyers mortgages, a decline of 5.2 per cent on the previous month. This figures is down 1.9 per cent on December 2016.

UK Finance said there were 30,7000 new home mover mortgages completed in the month. This is a 4.7 per cent decline on the number of comparable mortgages completed in December the previous year.  The value of these loans (at £6.5bn) was also 3 per cent down year-on year.

The average home mover is 39 and has an income of £55,000.

December’s lending figures show there has been a sharp contraction in buy-to-let lending. Over the month there were 5,300 new buy-to-let house purchases, 17.2 per cent less than buy-to-let loans arranged in December 2016. By value there was £0.8bn of lending in the month, 11.1 per cent down year-on year.

Buy-to-let remortgages also declined: during December there were 9,900 of these loans arranged, 11.6 per cent fewer than in December 2016.

UK Finances head of mortgages Paul Smee says: “In 2017 the number of first-time buyers reached its highest level in a decade, which is welcome news for those getting started on the housing ladder.

“But although the market remains competitive there is no room for complacency with weaker December figures consistent with our market forecast of subdued growth this year.

“We are also seeing a less buoyant buy-to-let market which continues to be impacted by recent tax and regulatory changes. This will continue to flatten lending volumes this year.”

Bluestone Mortgages director of sales Steve Seal says: “It’s great to see the number of first-time buyers increase year-on year. However there is still a larger group of people that are not being treated fairly when it comes to the mortgage application process.

“Successful business owners, entrepreneurs or contractors are being turned away by high-street lenders for not fitting traditional lending criteria. “


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