Buy-to-let remortgaging the only growth area in February

Buy-to-let lending was the only category of mortgage borrowing to rise in February compared to the previous year, new data has shown.

The Council of Mortgage Lenders, which represents providers accounting for 95 per cent of UK residential mortgage lending, said the value of buy-to-let loans fell by 12 per cent from January 2015, but was 16 per cent higher than in February last year.

The value of mortgages to homeowners, first-time buyers and those seeking to remortgage all fell over the year.

Paul Smee, CML director-general, said: "As with January, seasonal factors have played their part in dampening house purchase lending activity in February. This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months.

"Buy-to-let, in contrast, has shown year-on-year lending increases, due almost completely to remortgaging, which is typically strong in the buy-to-let market."

Gross mortgage lending was £13.6bn in February - a fall of 8 per cent from previous month and 8 per cent lower than in February last year.

Brian Murphy, head of lending at broker Mortgage Advice Bureau, expressed concern over a 12.9 per cent year-on-year fall in the value of first time buyers' loans coupled with a 7.2 per cent increase in house prices over the same period.

"This growth in prices coupled with a fall in loan values means that many would-be borrowers on modest incomes may find it increasingly difficult to get on to the housing ladder," he said.

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