House purchase mortgages down 26% in a year

Monday 16th May 2011

Mortgages for house purchase in the first quarter of this year sank 26% by volume and 27% by value compared with the last quarter of last year.

This was despite a big rise between February and March, when mortgages for house purchase rose 24% in number to 37,800, and by 26% in terms of value.

The pattern of lending to first-time buyers followed that of house purchase lending generally – up in March compared with February, but down compared year on year. There were 14,600 mortgages, worth £1.7bn, advanced to first-time buyers in March, an increase of 28% in volume and 31% in value from February, but a fall of 17% in volume and 16% in value compared to March 2010.

The number of house purchase mortgages to both first-time buyers and home movers fell on a quarterly basis. First-time buyers fell 23% and home movers 28%.


Lending criteria throughout the first quarter stayed relatively unchanged for both first-time buyers and home movers. First-time buyers borrowed on average 79% of the value of their property in March and in the first quarter as a whole. Home movers borrowed on average 68% of the value of their property in the first quarter.

The figures are from the Council of Mortgage Lenders, whose director general, Michael Coogan, said: “We saw a significant increase in both house purchase and remortgage lending in March but, over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future.

“Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity, timing and spread of completions in the second quarter, meaning that any one month’s data should not be interpreted as a reflection of a trend.

“It may take until publication of the second quarter’s activity to get a full understanding of how the market has reacted to the squeeze on household incomes.”