Comment on CML for May 2016
Tue 17 May 2016
David Brown, CEO of Marsh & Parsons, comments: "The March mortgage market was unprecedented in terms of the level of lending to landlords. The announcement of the additional 3% stamp duty liable on additional properties acted as the starting gun back in November, but it all came to a head in the final stretch towards the 1st April culminating in astonishing growth in March. Beating the deadline has been a key preoccupation for many this spring, meaning that borrowing behaviour has strayed well off the beaten track. In London in particular, where higher sums were at stake, buy-to-let investors and second home-owners were behind three-fifths of all property purchases in the three months to March 2016, becoming much more prominent in the property market than they have been previously.
"This was only ever going to be a short-term phenomenon, and with new parameters in place, there is now a sense of business resuming as usual. Encouragingly, strong growth elsewhere in the mortgage market means were unlikely to see any severe withdrawal symptoms from a buy-to-let lull in the aftermath of this whirlwind."
CML Monthly Lending Trends, March & Q1 2016
- Landlords borrowed 7.1bn in March 2016, up 87% month-on-month and 163% year-on-year. This came to 45,000 loans in total, up 88% compared to February and up 142% compared to March 2015.
- Landlords borrowed 14.6bn in Q1 2016, up 36% quarter-on-quarter and 92% year-on-year. This came to 92,700 loans in total, up 31% compared to the fourth quarter 2015 and 77% compared to the first quarter 2015.
- In March 2016, first-time buyers borrowed 4.5bn, up 32% on February and 29% on March last year. This totalled 28,100 loans, up 28% month-on-month and 17% year-on-year. Home-owners borrowed 13.8bn for house purchase, up 59% month-on-month and 60% year-on-year. They took out 69,800 loans, up 45% on February and 38% on March 2015.Home movers borrowed 9.3bn, up 75% on February and 82% compared to a year ago. This totalled 41,700 loans, up 60% month-on-month and 58% on March 2015.