No change for house purchase lending in November: CML

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November was a stable month with very few changes to the volume and value of mortgage activity, according to new data from the Council of Mortgage Lenders.

The trade body said 44,000 loans for house purchase, worth £6.3 billion, were advanced in the month. This was unchanged from October and down 15% by volume and 13% by value from November 2009.

Loans for remortgage were down compared to the same period last year (12% by volume and 14% by value) but they showed a small increase from 25,000 (worth £3 billion) in October to 26,000 (worth £3.1 billion) in November. Bank of England Lending to Individuals figures showed a much larger increase in remortgage activity (from 29,200 loans in October to 36,300 in November). The Bank’s figures are based on mortgage approvals, and therefore are a lead indicator of the CML figures which are for mortgage advances. This indicates there may be a further, more substantial increase in CML remortgage data in the coming months.

First-time buyers took out 16,400 loans (worth £1.9 billion) in November, a 3% increase from October (with the value staying the same) and a 19% decrease (down 17% by value) from the same month last year. Loans to home movers, on the other hand, were down 2% from October with 27,800 loans (worth £4.4 billion), and down 12% compared to November 2009. Like first-time buyers, the value of lending to home movers was unchanged between October and November.

Lower monthly year-on-year business continues in all areas due to the distortions caused by some households bringing forwards house purchase activity before the close of 2009’s stamp duty concession.

Credit criteria remain tight although loan-to-value ratios appear to have eased a little, particularly for first-time buyers. This group borrowed 80% of their home’s value in November and is the second month in a row the loan to value has been at 80%. This is the highest the market has seen since November 2008.

Home movers on average borrowed 68% of their home’s value for the second month running, up from the low of 67% seen over the summer. For all house purchasers, the proportion of income needed to cover the mortgage interest was at an all-time low of 10.7% in November.

CML director general Michael Coogan said: “It is encouraging to see credit criteria becoming a little more liberal for first-time buyers. But the funding and capital constraints on lenders will continue to exert a dampening effect on lending

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