Mortgage lending to first time buyers increases as stamp duty bites landlords
Buy to let landlords continued to shun the property market towards the end of last year, allowing more first time buyers to take out home loans.
The number of loans taken out by landlords fell 10 per cent year-on-year in November, according to figures from the Council of Mortgage Lenders (CML), suggesting that tax changes on second homes continued to put off buy to let investors.
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It was the strongest month of buy to let lending since the stamp duty rate on second homes was increased by three per cent in April, but Paul Smee, director general of the CML, said buy to let lending in 2017 would be lower than it was in 2015.
First-time buyers took out 30,100 loans in November, up eight per cent year-on-year.
"Lending remained resilient through regulatory and political change, and aspirations for home-ownership remain strong in the UK," Smee said.
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Remortgaging was also strong in November as consumers took advantage of rock-bottom mortgage rates. Remortgaging activity hit £5.8bn, an increase of 14 per cent on the same month a year ago.
Jeremy Duncombe, director of the Legal & General Mortgage Club, said:
The mortgage market has clearly been defined by a surge in remortgaging activity in the second half of 2016…It's a positive move for the market to see thousands of consumers proactively taking advantage of prevailing low interest rates, saving themselves thousands of pounds a year.