Loans to home-buyers fall 8 per cent in October

A total of 57,800 loans were taken out during the month, which was down 8 per cent on September and 13 per cent on October 2015.

First-time buyers borrowed £4.5 billion, down 8 per cent on September and 2 per cent on October last year. This equated to 28,900 loans, down 8 per cent month-on-month and 4 per cent year-on-year.

Home movers borrowed £5.9 billion, down 9 per cent on a month ago and 18 per cent compared to a year ago. This represented 28,900 loans, down 8 per cent month-on-month and 20 per cent on October 2015.

Remortgage activity totalled £6.1 billion, up 11 per cent on September and 7 per cent compared to a year ago. This came to 34,700 loans, up 10 per cent month-on-month and 5 per cent compared to a year ago.

Landlords borrowed £3 billion, up 7 per cent month-on-month but down 21 per cent year-on-year. This came to 18,600 loans in total, up 2 per cent compared to September but down 25 per cent compared to October 2015.

Paul Smee, director general of the CML, said: “Buy-to-let house purchase lending remains weak following the change to stamp duty on second properties in April. With lenders now tightening affordability criteria ahead of the Prudential Regulation Authority’s stress tests and the forthcoming tax relief changes next year, these lower volumes are likely to be the ‘new normal’.

“Home-owner and buy-to-let remortgage lending, however, has recovered and is running at its strongest levels since 2009. This appears to be linked to borrowers taking advantage of the re-pricing of mortgages following the base rate cut.”