Release date: 16 May 2018

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1 Release date: 16 May 218 UK Finance: Mortgage Trends Update March 218 Remortgaging market softens in March after busy start to year Key data highlights: There was 51bn of new lending to first-time in the month, up two per cent year-on-year 31,2 new first-time buyer mortgages were completed in the month, some 19 per cent fewer than in the same month a year earlier The average first-time buyer is 3 and has a gross household income of 42, There was 61bn of new lending to homemovers in the month, 47 per cent down year-on-year There were 28,4 new homemover mortgages completed in the month, some 78 per cent fewer than in the same month a year earlier The average homemover is 39 and has a gross household income of 56, The 56bn of remortgaging in the month was 97 per cent down year-on-year There were 32,4 new homeowner remortgages completed in the month, some 12 per cent fewer than in the same month a year earlier There were 5,5 new buy-to-let home purchase mortgages completed in the month, some 191 per cent fewer than in the same month a year earlier By value this was 8bn of lending in the month, 2 per cent down year-on-year UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords Mortgage Interest Tax Relief (MITR), the three per cent Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA) There were 12,6 new buy-to-let remortgages completed in the month, some 8 per cent more than in the same month a year earlier By value this was 2bn of lending in the month, the same year-on-year Separate figures from the Bank of England show that gross mortgage lending in the first quarter of 218 was 611 billion, up 34 per cent from 59 billion in the first quarter of 217 Commenting on the data, Jackie Bennett, Director of Mortgages at UK Finance, said: Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise "There has been relatively flat growth in lending to first-time, reflecting recent Bank of England figures showing a fall in mortgage approvals Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand Notes to Editor 1 For more information please call the UK Finance press office on or press@ukfinanceorguk 2 UK Finance is a trade association formed on 1 July 217 to represent the finance and banking industry operating in the UK It represents around 3 firms in the UK providing credit, banking, markets and payment-related services The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association

2 3 The data shown is grossed up from the sample of lenders reporting to reflect total market size, based on total market volumes of Mortgage Product volumes of Mortgage Product Sales Data published by the FCA, so our historical figures are subject to revision as and when the FCA makes revisions to the market totals The average figures shown are medians, as they tend to better represent the position of the typical borrower Affordability measures are based on median averages of calculations for individual transactions Capital & interest payment calculations only include mortgages taken out on a full capital and interest repayment basis and are calculated based on the reported repayment term, interest rate, loan amount and income for each transaction 4 Income metrics are presented on a gross household basis, as the sum of all income sources for all borrowers included in the affordability assessment 5 6 UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords Mortgage Interest Tax Relief (MITR), the 3% Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority Please see more details along with a chart showing buy-to-let house purchases and remortgaging since 214 here: link Bank of England statistics show that gross mortgage lending in the first quarter of 218 was 611 billion, up 34 per cent from 59 billion in the first quarter of 217: 7 Bank of England statistics show there were 66,911 home purchase mortgage approvals in March 218, 17 per cent lower than the same month a year earlier Next update: 14 June 218

3 Percentage Multiple Percentage millions Release date: 16 May 218 House Purchase of new residential purchase, secured by a first charge on the property 4, 3, 2, 31,2-19% Home movers 28,4-78% Value of new lending Value of new residential purchase, secured by a first charge on the property 8, 6, 4, 2, 51bn 2% Home movers 61bn -47% Loan to value Ratio of loan amount advanced to property value Year-on-year comparison is the absolute change in the percentage % 9% Home movers 73% -5% 2, 175, 14,499 52% Loan size Median value of loans advanced 15, 125, 1, Home movers 18,733 48% Loan to income multiple Ratio of loan amount advanced to gross income of all borrowers Year-on-year comparison is the absolute change in the multiple Home movers Repayments as % of income Proportion of gross income used to service capital and interest repayments Year-onyear comparison is the absolute change in the percentage % -2% Home movers 174% -1% Borrower income Median gross income of all borrowers used in mortgage assessment 6, 55, 5, 45, 4, 35, 3, 41,76 44% Home movers 55,786 31%

4 millions millions Remortgaging of remortgages of residential loans remortgaged, secured by a first charge on the property 55, 5, 45, 4, 35, 3, 25, 2, Home owners 32,4-12% Value of remortgages Value of residential loans remortgaged, secured by a first charge on the property 8, 6, 4, Home owners 56bn -97% 2, Buy-to-let of new buy-to-let purchase or remortgaging, secured by a first charge on the property 2, 15, 5, House purchase 5,5-191% Remortgage 12,6 8% Value of new lending Value of new buy-to-let purchase or remortgaging, secured by a first charge on the property 3, 2, 1, House purchase 8bn -2% Remortgage 2bn % Next update: 14 June 218

5 Release date: 16 May 218 Homeowner House Purchase Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Source table 31,8 25,8 29,8 36,3 31,1 34,7 31, 3,4 34,2 3,5 24,5 25,3 31,2 ML2 Home movers 3,8 26,2 29,8 36,6 33,8 38,8 32,1 32,1 35,8 3,4 25,2 25,1 28,4 ML3 Value of new lending ( mn) 5, 4,2 4,8 5,9 5,1 5,7 5,1 4,9 5,5 5, 4, 4,1 5,1 ML2 Home movers 6,4 5,6 6,3 7,8 7,3 8,5 6,9 6,8 7,5 6,5 5,5 5,3 6,1 ML3 Loan to value ML2 Home movers ML3 Loan size 133,5 136,35 137, 138, , 14, 138, 139, 138, 141, ,5 138,15 14,499 ML2 Home movers 172, , ,245 18, 18, 182,75 18, 179,95 175,5 18,999 18, 179,995 18,733 ML3 Loan to income multiple ML2 Home movers ML3 Repayments as % of income ML2 Home movers ML3 Borrower income 4, 4,755 4,549 41, 41, 41,265 4,848 4,972 4,461 41,187 41, 41, 41,76 ML2 Home movers 54,134 55,177 55, 55,286 55,847 56,15 55,661 55,96 54,277 55,183 55,2 55,129 55,786 ML3 Homeowner Remortgaging Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Source table of remortgages Home owners 36,8 3, 33,5 34,5 38,1 37,1 35,9 41, 39,2 31,2 49,9 35,7 32,4 ML1 Value of remortgages ( mn) Home owners 6,2 5,2 5,8 6,1 6,9 6,5 6,4 7,5 6,8 5,5 8,9 6,1 5,6 ML1 Buy-to-let Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Source table House purchase 6,8 5,3 6,1 6,7 6,4 6,9 6,4 6,7 6,7 5,3 5,6 5,2 5,5 MM17 Remortgage 12,5 1,8 12,7 12,6 13,7 13,2 12,4 14,9 13,7 9,8 16,4 14,1 12,6 MM17 Value of new lending ( mn) House purchase 1, , 9 1, MM17 Remortgage 2, 1,7 1,9 2, 2,2 2,1 2, 2,4 2,2 1,6 2,6 2,2 2, MM17 UK Finance publishes aggregate information on mortgages based on data supplied by our members, and grossed up to estimate total market size Remortgage figures shown in this release include refinancing with the same lender, in those cases where a new mortgage contract is created For this reason these figures will generally exceed those published by the Bank of England, whose remortgage data exclude such internal refinancing transactions Source data tables are available to UK Finance members or data associates from wwwcmlorguk/industry-data/industry-data-tables/ For information or enquiries, please contact ukfstatistics@ukfinanceorguk For media enquiries, journalists should contact press@ukfinanceorguk Next update: 14 June 218