Lending to home movers increased by £800 million or higher by 18.6% for the month as other buyer types lag behind during May.

The Council of Mortgage Lending (CML) report shows buoyant lending to home movers for the month of May increasing to £5.1 billion from £4.3 billion the previous month or 18.6% higher compared to a 1.9% fall year-on-year.

In terms of numbers there were 26,300 home movers up 17.9% from 22,300 the previous month although over the year remains 4.7% down.

The average age for a borrower is 39 with a loan of £166,000 and for affordability income to loan multiples increasing to 3.25 on an income of £53,300, compared to 3.08 a year ago.

Average loan to value was 72.2% compared to 73.9% a year ago suggesting home movers have a larger deposit or equity.

Mortgage lending up over the year

The value of loans advanced has increased year-on-year from £15.4 billion to £17.1 billion to May up 11.0% including first time buyers, home mover, remortgage buyers and buy-to-let landlords.

In terms of numbers this has increased by a smaller amount of 7.5% from 93,900 a year ago to 101,000 today.

The strongest rise over the year is from existing homeowner remortgage buyers higher by 30.0% by value to £5.2 billion followed by buy-to-let remortgages up 26.7% to £1.9 billion in May.

Over the month both remortgage types have struggled with homeowners falling 14.8% and buy-to-let remaining unchanged.

According to Paul Smee director general of the CML, following the rise in stamp duty in March and dip in April, the market is regaining some equilibrium although buy-to-let continues at lower levels as expected.

First time buyer lending improves

There has been a steady improvement in the number of loans to first time buyers increasing 16.0% to 27,500 compared to 23,700 a year ago and 9.1% higher month-on-month.

Help with the deposit for a new home can come from family members as the equity release buyer can access money using a lifetime mortgage and give to a child or grandchild.

In terms of value loans are up by 22.9% from £3.5 billion last year to £4.3 billion to May and over the month are 10.3% higher.

The average age for a borrower is 30 with a loan of £133,000 and for affordability income to loan multiples increasing to 3.51 on an income of £39,700, compared to 3.37 a year ago.

Average loan to value was 84.6% compared to 83.3% a year ago indicating first time buyer deposits are a smaller proportion of the property value.

Paul Smee has said, Brexit, and its likely effect on the market, is a question to which the answer will not immediately be forthcoming as lending volumes may be affected by uncertain consumer sentiment.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.

Learn more by using the mortgage monthly cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

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