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Santander lends £7.1bn in first quarter

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  • 27/04/2016
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Santander lends £7.1bn in first quarter
Gross mortgage lending at Santander hit £7.1bn in quarter one, up from £5bn during the same period a year earlier, its quarterly financial statement shows.

The lender said it expected lending growth recorded in 2015 to continue into this year, but remained conscious of uncertainty surrounding interest rates and the upcoming EU referendum.

Santander’s £7.1bn in gross mortgage lending during the first quarter included £900m to first-time buyers, with the lender supporting 5,700 fledgling buyers onto the housing ladder.

Interest-only mortgage balances at the bank decreased by £0.3bn from the final quarter of 2015, to total £54.8bn. In contrast, buy-to-let balances surged by £1bn to reach £6bn and represent 4% of Santander’s total mortgage book. Total mortgage balances grew slightly on the previous quarter from £153bn to £154bn, and were also up on a year earlier when they stood at £150bn.

Santander said 5,300 buy-to-let mortgages were completed in Q1 to represent 14% of new mortgage business flow, as investors raced to beat the implementation of a 3% Stamp Duty premium on second homes from 1 April.

A spokesperson at the bank said the Stamp Duty rush had contributed to “slightly higher than expected” mortgage lending in the first quarter, with its lending figures also reflective of the average loan size increasing in line with soaring house prices.

The average loan size for new business at Santander now totals £202,000 for the UK overall, £266,000 for the South East including London and £141,000 for the rest of the UK.

Santander said: “We anticipate house prices will continue to rise throughout 2016, but growth will be moderate compared to the pace witnessed in 2015. The surge in completions in March may have skewed figures and meant that Q1 has been top-loaded with lending that would have otherwise taken place throughout the year. There are a number of factors that could impact lending throughout 2016 and we recognise the industry as a whole may face some challenges.”

Total mortgage stock at Santander is mostly made up of homemovers and remortgagor loans at 44% and 33%, respectively. First-time buyers represented 19% of total stock and buy-to-let loans made up 4% in the first quarter. The average loan-to-value on new deals at the lender in Q1 stood at 65%.

Fixed rate mortgages made up the majority of Santander’s total mortgage stock at 56% in the first quarter, with 22% made up of variable rates and a further 22% of Standard Variable Rates.

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