Mortgage lending subsides but predicted to bounce in 2016 - CML

Bank mortgage lending fell away towards the end of the year, new figures show, but was still higher than at the same time the year before.

Data from the Council for Mortgage Lenders showed lending to home-buyers fell 9% month-on-month in November to £10.7bn in November, though this was up 17.6% on November 2014, partially due to higher house prices.

The CML said the monthly decline was as expected 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,” the trade body's director general Paul Smee added.

People moving house took out 32,300 loans, down 10% MoM and up 9% YoY.

The number of mortgages for first-time buyers totalled 27,900, down 7.9% month-on-month but up 10.3% year-on-year.

The CML pointed out that, thanks to competitive mortgage rates, first-time buyers continue to pay low levels of their monthly household income to service the capital and interest rate payments of their mortgage, reaching the joint lowest average percentage level since this measure was tracked of 18.3%.

Meanwhile, despite government concerns, buy-to-let mortgage advances continued to grow, surging 17.6% YoY in November to 10,000.

“Our forecasts anticipate that gross lending will continue a slow but steady upward trajectory over the next two years,” Smee said.