Total gross mortgage lending between January and November was 7.7% higher than the full year figure for 2013
Nick Barnes, Head of Research
Gross mortgage lending fell in November according to the Council of Mortgage Lenders (CML) – by 9.2% compared to the previous month and by 0.1% compared to November 2013. However, total gross mortgage lending between January and November was 7.7% higher than the full year figure for 2013.
Data from the British Bankers' Association reveal that of the total number of loans secured against dwellings between January and November 2014, 61.5% were for house purchase, 28.5% for remortgaging and 10% for other purposes.
Affordability (as measured by average mortgage payments as a percentage of income) worsened in 2014 according to the Halifax. National affordability declined from 27.9% in Q1 to 29.5% in Q3, while in London the corresponding figures were 39.4% and 44.2%.
Despite the fact that affordability is worsening and that the mortgage regulatory environment has tightened and faces the prospect of further controls and a possible hike in interest rates, the CML forecasts that gross mortgage lending will rise by 7.3% this year.
The proportion of new fixed rate mortgage loans rose in 2014, from 81% in Q1 to 82.6% in Q3 according to data from the bank of England. Loan-to-value (LTV) ratios were broadly stable in 2014: the majority of new loans (just over 64%) were granted at LTVs of below 75%, while around 31% were between >75% and 90%.
According to the CML, there were 19,600 buy-to-let loans in October, representing lending of £2.7bn. This continued the growth seen in the previous month and loan volumes and the value of these loans were both up 8% on September. Compared to October 2013, the number of loans increased 22% and the value of these loans rose by 29%.