Buy-to-let is strongest yearly performer
From its monthly analysis of the market the CML found that buy-to-let volumes have increased by 11% year-on-year, as there were 15,900 loans issued in February valued at £2.2bn.
In contrast lending volumes for house purchase, first-time buyers and homemovers all fell by 16% year-on-year, while remortgage lending fell by 14% over the same period.
Paul Smee, director general of the CML, said: “As with January, seasonal factors have played their part in dampening house purchase lending activity in February.
“This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months.
“Buy-to-let, in contrast, has shown year-on-year lending increases, due almost completely to remortgaging which is typically strong in the buy-to-let market.”
The CML launched the buy-to-let statement of practice this month, which offers landlords guidance on how buy-to-let lenders operate.
Smee added: “We hope it will help in people’s understanding of the buy-to-let lending environment and the transparency of the statement of practice can give confidence to landlords that clear and consistent lending policies are being undertaken.”
Compared to January 2015 the entire market has slowed based on volumes, as remortgage lending decreased by 16% from January and buy-to-let lending fell by 13% over the same period.
There were also more minor falls for in lending to homemovers (2%), house purchasers (1%) and first-time buyers (1%).
Andy Knee, chief executive of LMS, said: “We should be past winter’s seasonal lull by now, so it appears the general election is contributing to this extended calm in the housing market.
“This is also obvious in other elements of consumer spending, as historical zero inflation continues month-on-month.
“The tranquil mood is likely to continue into spring and a bounce back in the property market now only appears possible following the outcome of the election.”
In February there were 40,600 loans issued for house purchases, 18,700 for first-time buyers, 21,900 for homemovers and 21,500 for remortgagers.
Total gross mortgage lending stood at £13.6bn in February, an 8% fall from both the month and the year before.