Bob Pannell, CML chief economist, comments: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months. August’s lending of £20 billion marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007. We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, comments: “Lenders traditionally see a summer lull in the mortgage market in August, with prospective borrowers more focussed on vacations rather than applications. For many lenders this year was no different. With this in mind, lending was always going to struggle to top the seven year high we saw in July.
However, let’s not confuse a monthly blip with a long-term trend. Buy to let lending remains healthy, and conditions are supportive for homeowners too, with mortgage rates still near the bottom, while we are also seeing a return of low deposit products, which will support activity. Yes, house price growth will continue to stretch affordability, so it’s encouraging that wage growth is accelerating, although that does, of course, bring with it inflationary pressures and the prospect of interest rate rises.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "With the uncertainty that plagued the housing market at the start of the year well out of the way, combined with lenders who are keen to do lots of lending, lost ground looks set to be made up in the second half. Despite fears that we have seen the best of the fixed rates, lenders have good capacity to lend, with five-year deals still available at less than 2.5 per cent.
With talk of a rate rise on the horizon, and some excellent deals available, it is a good time to remortgage and the number of borrowers doing so is rising accordingly. The mortgage market remains over supplied with lenders having more money to lend than there are people looking for mortgages. This means criteria will have to loosen and rates will have to remain low to ensure lenders hit their volume targets.
For many borrowers the main issue is not so much finding a cheap mortgage rate but being able to prove affordability to satisfy the lender and meet tighter criteria post Mortgage Market Review."
Paul Smith, CEO of haart estate agents, had this to say: “The CML data shows the mortgage market is remaining strong with a 12% increase in gross mortgage lending since last August and the highest August figure since 2007. This comes as a result of rising house prices for both first-time buyers and those further up the property ladder.
Our data shows that the average UK house price is up 6.4% in the last year and for first-time buyers the increase has been even greater with a 7.7% rise. This is then being reflected in the size of the mortgage that people are having to take out. For first-time buyers in particular this could prove problematic as mortgages become more unaffordable.
It is important for the Government to focus on implementing measures to increase the supply of new homes to ease house price rises for first-time buyers, thereby making it easier for them to take their first step on the property ladder. A form of land relief to make it easier to build is one way to do this.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “Borrowing is firmly out of the woods and enjoying a prolonged stretch on the open road. Gross mortgage lending has put in good distance year-on-year for the third month running now, and this also represents the best August for lending in eight years – finally overtaking pre-financial crisis speeds.
Mortgage demand is firing on all cylinders – both for first-time buyers and existing homeowners. In the property market itself, this boost to demand is combining with a slower supply of homes for sale. Sellers aren’t matching up with buyers, and this competition is steadily speeding up property prices. Meanwhile, for those who do already own their home there is also a real impetus to remortgage and fix to the best deals before interest rates are expected to rise next year.”
