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Research 22 January 2015

Chrome January 2015 - Mortgage market

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%.

Download Chestertons Residential Observer - January 2015