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House Purchase Lending Figures Down in November

New CML data on lending activities in November 2014 reveal a decline in lending to new homebuyers, home movers, and remortgaging applicants when compared to November 2013 totals. There has been, however, year-on-year growth in buy-to-let lending.

For first-time buyers there was a month-on-month decline in lending, with November loan totals coming to 25,900: an 11% reduction on October and 3% down on the year before. Value-wise, £3.8 billion was provided to new buyers in November, representing a 12% decrease on October but still up 6% compared to November 2013.

Home mover loans were also lower month-on-month. The number of loans made was 29,700, down 13% from October and 10% from November 2013. In terms of value, £5.4 billion was provided to movers, down 14% on October and 5% on November 2013.

Remortgage lending levels witnessed a month-on-month decline in November, with 24,000 remortgage loans being granted in total. This number was down 8% from October’s figures and 16% lower than in November last year. The loan value was £3.6 billion, down 10% on October and 14% on November 2013.

Buy-to-let loans totalled 17,700 in November, representing a value of £2.4bn. This is a decrease on October, with loan amounts down 10% and their values down 11%. Compared to November last year, the number of loans went up 9% and their value was up 14%.

Gross mortgage lending came to £16.5 billion in November, which is 11% lower than the previous month and 3% lower than November last year.

There were 55,600 loans for house purchases in November, a month-on-month decrease and down 12% compared to October. Loan value was £9.2bn, a reduction of 13%. Compared to November of last year, the number of loans provided went down by 7%.

Latent Defects Insurance

First-time buyers typically borrowed 3.37 times their gross income, a fractional reduction over 3.39 in October. The average loan size for these new buyers fell to £124,822 in November, down from £125,800 the month before. The average gross income of a new buyer household was £38,476 down from £38,801 in October.

First-time homebuyers used 19.3% of their gross income to cover both capital and interest payments., significantly less than the December 2007 total of 24.8%.

Affordability for home movers remained consistent, with borrowers tending to receive loans worth 3.01 times their gross income in November. The average loan amount was £152,995, with the gross income of the typical home mover being £53,368 in November.

Remortgage financing activity experienced a month-on-month reduction in November, at 24,000 loans. This figure represented an 8% decrease on October and 16% on November 2013. The overall loan value was down 10% on the previous month and 14% lower than November last year.

In terms of buy-to-let lending, there were 17,700 loans issued in November, with a cumulative value of £2.4bn. The number of loans decreased 10% and their value was 11% lower compared to October. When compared to November 2013, there was a 9% increase volume-wise and 14% in terms of value.

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