Data from the CML shows the number of loans to homebuyers is 8% lower for October indicating a slowdown in the UK market.

The Council of Mortgage Lenders (CML) report shows homebuyers, including first time buyers and home movers, decreased by -8.1% from 62,900 loans in September to 57,800 in October.

In contrast remortgage buyers were up 9.8% from 31,600 last month to 34,700 with a value of £6.1 billion as homeowners secure lower mortgage rates following the Bank of England cutting the base rate to 0.25%.

The buy-to-let market remains weak following the change to stamp duty in April with the number of loans advanced -45.1% lower than this time last year.

Cost of mortgage at all time low

Paul Smee, director general of the CML said the amount borrowers are paying as a percentage of their household income to service capital and interest rates reached an all-time low for both first time buyers and home movers at 17.6%.

In terms of mortgage affordability, income multiples for first time buyers increased slightly from 3.53 to 3.56 and average household income are about the same of £40,000 in October.

The average loan borrowed by first time buyers was unchanged at £133,200 compared to home movers increasing slightly to £171,700.

For home movers income multiples were unchanged at 3.26 and average household income decreased slightly to £54,900.

Lower fixed rates can also be secure for older equity release mortgage buyers from 4.0% upwards without any evidence of earnings which is important for borrowers with only pension income.

Buy-to-let lending remains weak

Lending to buy-to-let landlords for new purchases is -45.1% lower than this time last year and remains weak following the change to stamp duty on second properties in April, says Mr Smee.

The number of new loans reduced from 11,300 last year to 6,200 in October 2016 and the value of loans advanced reduced from £1.6 billion to only £900 million.

Mr Smee said, lenders have tightened their affordability criteria ahead of new regulatory stress tests and tax relief changes next year so these lower volumes are likely to be the ‘new normal’.

There was a slight rebound in the remortgage buy-to-let market in the last month with a 6.1% increase in the number of loans to 12,200 and vale increasing to £2.0 billion.

Increases in both the homeowner and buy-to-let remortgage lending is at its strongest levels since 2009 and appears to be linked to borrowers taking advantage of the fall in mortgages interest costs following the base rate cut.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release mortgage calculator.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything or even gift to a child or grandchild the deposit on their first home.

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