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Latest CML Figures Show Home Lending Fall

The UK has seen a sharp drop in home lending for the month of April as was expected, according to the Council of Mortgage Lenders’ (CML) latest figures.

For the month, lending for home purchases went down by 40% compared with March. However, experts have insisted that this was just a blip caused by abnormally high borrowing levels in March ahead of the change in stamp duty.

Borrowing from home owners went down by 4% in comparison to a year ago, with £8.1 billion being borrowed, while 47,300 loans were taken out which is a 31% decrease from March and a 5% fall from April last year.

Borrowing from first time buyers went down to £3.9 billion, which is up 15% from April 2015 but down 11% from March 2016. This is equal to 25,100 loans, a 7% year on year increase but a 9% month on month decrease.

Activity in re-mortgages was £6 billion in total, which is a 40% increase from last year and up 25% on March. This resulted in a total of 16,100 loans, which is a 64% decrease from March and a 10% fall from last April.

Meanwhile, borrowing from landlords totalled £2.5 billion, a 7% year on year decrease and a fall of 65% month on month. This came to a total of just over 16,000 loans, which is a 64% fall from the previous month and a 10% decrease from last year.

CML Director General, Paul Smee, insisted that it was not surprising to see an ease back in lending after March’s significant activity rises as borrowers made sure they beat the deadline for second home stamp duty.

He added that he is expecting the market to take a number of months before it returns to its former levels after the surge in lending.

Meanwhile, LMS Chief Executive, Andy Knee, says that the home loan market is growing thanks to remortgaging.

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BDC 317 : Jun 2024