Housing market remains 'robust' as mortgage numbers rise

The number of mortgages handed out to first-time buyers, home movers and buy-to-let landlords grew in November compared with a year earlier in a sign that the housing market remains "robust".

A total of £4.2 billion-worth of home loans were advanced to first-time buyers in November 2015, marking a 14% increase compared with November 2014, the Council of Mortgage Lenders (CML) said.

Meanwhile, loans with a collective value of £6.5 billion were advanced to home movers, a figure which was up by 20% year-on-year.%VIRTUAL-ArticleSidebar-property-guide%

And £3.5 billion-worth of mortgages were handed out for buy-to-let purposes, showing a 45% annual increase. The bulk of these were for investors wanting to re-mortgage, although within this total, £1.3 billion buy-to-let loans were handed out for house purchase, marking a 30% jump compared with November 2014.

In late November last year, Chancellor George Osborne unveiled plans for a stamp duty hike for buy-to-let investors. The announcement prompted suggestions that there could be a rush of investors snapping up properties to beat the tax increase.

From April 1 2016, people buying additional properties, such as buy-to-let properties and second homes, will pay an extra three percentage points above current stamp duty rates.

The CML's figures also show that re-mortgage lending was up by 36% in November 2015 compared with a year earlier, with £4.9 billion-worth of home loans handed out.

While lending to all sectors of the mortgage market was higher in November than a year earlier, it was also down compared with October, as the market saw the usual seasonal dip as Christmas approached.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the CML's figures reinforce "the impression of a robust market".

He said: "Lenders had a keen eye on year-end targets so there were some very competitive deals to tempt borrowers towards the end of last year, a trend that has continued into this one.

"The January sales has brought plenty of attractive deals, with many aimed at those coming up to re-mortgage who may be concerned that interest rates might finally rise this year."

Mr Harris said that while landlords may be "disgruntled" by the stamp duty hike, "they can't complain about some of the cheapest buy-to-let rates ever".

But Mr Harris said that some lenders are imposing tougher criteria on buy-to-let mortgages, making it harder for investors with smaller deposits to qualify, particularly in the South of England where returns for landlords tend to be lower compared with the high cost of buying a property there.

Paul Smee, director general of the CML, said: "As expected, mortgage lending activity eased back as the normal dip in the winter months began.

"There was still growth across all lending types in November compared to the year earlier suggesting continued improvement. Our forecasts anticipate that gross lending will continue a slow but steady upward trajectory over the next two years."