17th February 2015
The value of loans to buy-to-let borrowers increased by 32% in 2014, compared to the previous year, figures from the Council of Mortgage Lenders reveal.
Buy-to-let lending for 2014 totalled 197,700 in volume, which was up 23% compared to 2013. This totalled £27.4bn in value, which was a yearly increase of 32%.
Buy-to-let loans totalled 54,000 in the fourth quarter of 2014 – up 4% on the previous quarter and up 16% on the same period in 2013. This totalled in value £7.7bn, an increase of 5% on the third quarter and up 26% on the fourth quarter 2013.
In the fourth quarter, home-owner house purchase lending totalled 173,200 loans, which was a 5% quarter-on-quarter decline and compared to the fourth quarter of 2013 down 3%. The value of these loans (£28.8 billion) declined compared to the third quarter by 8% but up 2% compared to the same period in 2013.
First-time buyers in the fourth quarter saw minimal change compared to the previous quarter and the same quarter in 2013. There were 80,100 loans advanced to first-time buyers in this period – down 2% on the third quarter and unchanged compared to the fourth quarter of 2013. The value of these loans totalled £11.6 billion, which was down 5% on the third quarter but 5% up on the fourth quarter of 2013.
Home movers were advanced 93,100 loans in the fourth quarter, a decline of 8% compared to the third quarter and 5% down year-on-year. These loans totalled in value £17.2bn – 10% down on the previous quarter, but unchanged compared to the fourth quarter of 2013.
Remortgage lending declined this quarter with 73,100 loans advanced – down 3% on the third quarter and 13% down on the fourth quarter 2013. The value of these loans (£11.1 billion) declined 4% quarter-on-quarter and 10% year-on-year compared to the fourth quarter 2013.
Overall for 2014, home-owner house purchase totalled 676,900 loans, up 11% on 2013 and the highest annual lending level since 2007. This meant £112.7 billion was advanced in total in 2014 for house purchase, up 19% on 2013 and again the highest annual value since 2007.
First-time buyers in 2014 were advanced a total of 311,500 loans for house purchase, up 15% on 2013. The value of these loans (£45bn) also increased by 24% on the previous year.
Home movers were advanced a total of 365,400 loans for house purchase in 2014, up 8% on 2013. The value of these loans (£67.6bn) also increased by 16% on the previous year.
Total number of loans for remortgage was 303,100 in 2014 – down 6% compared to 2013. This totalled in value £46 billion, which was up 2% on 2013.
Paul Smee, director general of the CML, said: “Improving economic conditions, boosted by government schemes like Help to Buy, saw the highest amount of first-time buyers purchase their first home for seven years. The growth seen through 2013 and the beginning of 2014 in mortgage lending has softened in the last quarter, and we’d expect this steadying of the market to continue in 2015.
“In 2014, the mortgage market saw unprecedented change with the introduction of major regulatory reform but the market has adjusted and kept its stability throughout. There will be challenges in 2015, including preparation work on the European Directive implementation and a General Election potentially bringing new housing policies to be put in place. But the industry is stronger than a year ago and ready to meet the challenges going forward.”
The gross lending estimate for the fourth quarter of 2014 is £51.1 billion, down 8% on quarter three and down 1% on the fourth quarter of 2013. Overall, for 2014 the gross lending estimate is £204.4 billion, up 14% on 2013.