Taylor Scott International News
Home owners in the UK borrowed £8.7 billion for house purchases in February, up 4% month on month and 21% year on year, according to the data from the Council of Mortgage Lenders. They took out 48,000 loans a rise of 4% compared with January and up 12% on February 2015, the data also shows. First time buyers borrowed £3.4 billion, up 3% on January and 21% on February last year, a total of 22,000 loans, some 3% more month on month and 11% more than a year ago. Home movers borrowed £5.3 billion, up 4% on January and up 20% compared to a year ago. This totalled 26,000 loans, up 4% month on month and up 14% on February 2015. Remortgage activity totalled £4.8 billion, down 17% on January but up 37% compared to a year ago. This came to 28,400 loans, down 15% month on month but up 24% compared to a year ago. Landlords borrowed £3.7 billion in February, unchanged month on month but up 61% year on year. This came to 23,700 loans in total, up 1% compared to January and up 47% compared to February 2015. Paul Smee, director general of the CML, pointed out that there has been substantial increases in house purchase and remortgage activity year on year already in 2016 but warned that this reflects the sluggish market in early 2015, perhaps driven by election uncertainties. ‘Buy to let has also seen substantial year on year increases, with particularly strong growth in remortgaging, a pattern which we have seen in the buy to let sector the past six months,’ he said. ‘Activity has been boosted by landlords seeking to complete purchases before tax changes in April. We do not expect activity to show such strong year on year growth later in the year,’ he added. According to Steve Bolton, founder of Platinum Property Partners, it is significant that three in five buy to let loans are now for remortgage, with the number and value of these loans rising significantly year on year. ‘Landlords are clearly taking advantage of the low rates available on the market, especially as they will soon lose the ability to claim their mortgage interest payments as an allowable business expense,’ he said. He suggested that the 7% monthly increase in the number of buy to let purchase loans is perhaps an early indication of some landlords pushing to complete ahead of the changes to Stamp Duty implemented this month. ‘We expect to see an even greater rush of activity reported for March as landlords seek to complete on purchases,’ he explained. He pointed out that buy to let activity could plummet in the future as the cost of running a buy to let business continues to grow due to recent Government legislation. ‘The introduction of Section 24 of the Finance (No. 2) Act 2015 is a real threat as many landlords in the sector could find themselves… Taylor Scott International
Taylor Scott International, Taylor Scott
