Gross mortgage lending for May 2019 stands at £21.9bn

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in May 2019 was £21.9bn, 0.4 per cent lower than the same month in 2018.

  • The number of mortgages for home purchase approved by the main high street banks in May 2019 was 9.1 per cent higher than in the same month in 2018, reaching its highest level since June 2016.
  • Remortgage approvals were 3.7 per cent lower and approvals for other secured borrowing were 5.9 per cent higher than the same month a year earlier.

THE ECONOMY

  • The Office of National Statistics reported that Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.9% in May 2019, down from 2.0% in April 2019.
  • The Consumer Prices Index (CPI) 12-month rate was 2.0% in May 2019, down from 2.1% in April 2019.

HOUSING

Only minor changes month on month in the UK housing market according to Nationwide figures:

  • Annual house price growth slowed to 0.6%
  • Prices fall 0.2% month-on-month, after taking account of seasonal factors
  • Average Price (not seasonally adjusted) £214,946

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months”

Henry Knight, Managing Director of Springtide Capital commented:

“Mortgage lending proved resilient in May. Remortgage activity and first-time buyers continue to drive lending so far in 2019. Looking ahead, this trend is likely to continue, but the level of this will depend heavily on the economy.”

Mortgage Lenders and Administrators Statistics – 2019 Q1

The Mortgage Lenders and Administrators Return (MLAR) is a quarterly statistical release aggregated from data on mortgage lending activities provided by around 340 regulated mortgage lenders and administrators. Their Q1 findings include:

  • The outstanding value of all residential mortgage loans was £1,451 billion in 2019 Q1, 3.4% higher than a year earlier.
  • The value of gross mortgage advances was £63.3 billion in 2019 Q1, 1.4% higher than a year ago
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) was £63.8 billion, 4.5% higher than a year earlier.
  • The share of mortgage loans with loan to value (LTV) ratios exceeding 90% increased to 4.5% in 2019 Q1, compared to 3.3% a year earlier. This is its highest since 2017 Q2.
  • The proportion of high loan to income (LTI) lending (loans greater than four times the value of annual income for a single buyer or greater than three times the annual income for joint buyers) was 45.0% in Q1, 0.8 percentage points (pp) higher than a year earlier.
  • The share of lending for buy to let (BTL) purposes (including house purchase, remortgage and further advance) was 14.0% in 2019 Q1, marginally lower than a year earlier.
  • Lending to owner occupiers for house purchase accounted for 46.1% of total gross mortgage advances. Of this, 19.2% was to first-time buyers, which is consistent with a year earlier. The share of lending to home movers decreased marginally in the year to 26.9%.

Sources:

https://www.ukfinance.org.uk/data-and-research/data/household-finance/household-lending-and-deposits

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/May_2019.pdf

https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2019/2019-q1