CML announces rise in number of loans for home-buyers

The Council of Mortgage Lenders, representing the UK's biggest lenders, announced that there were 39, 900 house purchase loans in October, worth £5. 5 billion. This represented an increase of 14% in the number of loans from September. Despite this, numbers of loans for home purchase are still down year on year.

The increase in lending was evenly spread across first-time buyers and those moving home. There were 15, 400 loans to first-time buyers and 24, 500 home mover loans in October, up 15% and 14% respectively from September.

Previous years' figures show a modest seasonal increase between September and

October. The CML suggest that uncertainty in the summer about a stamp duty holiday may have inflated October completions compared with September.

Average loan-to-value and income multiples continued to reduce for all homebuyers as a result of falling house prices and tightened lending criteria. The CML say that first-time buyers typically borrowed 83% of the property’s value and 3. 10 times their income, down from 84% and 3. 18 in September. Home movers typically borrowed 68% of the property’s value and 2. 73 time their income, down from 71% and 2. 73 in September.

Interest payments have declined as a result of lower mortgage rates and income multiples. Interest payments typically consumed 19. 3% of a first-time buyer’s income, down from 19. 7% in September. Home movers typically spent 16. 1% of their income on interest payments, down from 16. 9% in September.