Mortgage lending reached £20.2 billion in December

According to the latest UK Finance Update on Lending report, December’s mortgage lending figures reached £20.2 billion, which shows gradual improvement.

Other highlights included:

  • First-time buyers have helped to improve mortgage lending figures.
  • Credit card spending has decreased slightly.

THE ECONOMY

The Office of National Statistics (ONS) recently reported that the Consumer Prices Index (CPI) 12-month rate had dropped back to 3.0 per cent in December 2017, a 1 per cent decrease from November 2017. The decrease has been primarily down to a reduction in prices of airfares and recreational goods including games and toys. However, it’s likely that the Monetary Policy Committee (MPC) will see this as a result of increased lending rates, which aims to stem inflation.

Unemployment sits at 4.3 per cent according to the ONS, who also state that between September and November there were 32.21 million people in work, an increase of 102,000 from the previous quarter.

UK Finance reported that credit card spending had decreased slightly in December 2017, sitting at 5.3 per cent.

HOUSING

UK mortgage lending reached £20.2 billion in December, which is 1.2 per cent higher year-on-year. The continued improvement in mortgage lending is due to increasing numbers of first-time buyers being able to purchase their first home.

Eric Leenders, Managing Director of Personal Finance at UK Finance said: “December is traditionally a quieter month for mortgages, although the underlying trend of increased numbers of first-time buyers, supported by government initiatives such as Help to Buy, continues. Mortgage rates remain low, driven by a competitive market, so customers should shop around for the best deals.”

Prior to December’s mortgage lending report, UK Finance reported in its Mortgage Trends Update that in November there were 34,800 new first-time buyer mortgages, which is 15.2 per cent higher year-on-year.

Other statistics from the November report included:

  • The average first-time buyer is 30 and has an income of £40,000.
  • There were 36,200 new home mover mortgages, which is 16.8 per cent more year-on-year.
  • The average home mover is 39 and has an income of £54,000.
  • There were 38,400 new homeowner remortgages, which is 8.5 per cent more year-on-year.
  • There were 6,600 new buy-to-let purchase mortgages, which is 1.5 per cent lower year-on-year. There were also 13,500 new buy-to-let remortgages, 3.6 per cent lower year-on-year.

Henry Knight, Managing Director, Springtide Capital commented: “Although the figures released show a somewhat subdued housing market, particularly in the London region, there are signs of a gradual improvement in mortgage lending. It is particularly positive to see first-time buyer figures increasing, which is vital to keep the housing market moving in an upward trend, reflecting historically low interest rates and a competitive marketplace.”

Sources:

https://www.ukfinance.org.uk/mortgage-market-activity-bouyant-during-november-2017/

https://www.ukfinance.org.uk/update-on-lending-for-december-2017/