CML economist Mohammad Jamei observes:
"Lending is set to finish the year stronger than it started, with the pace of lending recovering over the summer months. As we’ve said for the best part of 2015, lending continues to be supported by strong fundamentals, which are low inflation, strong wage growth, an improving labour market and competitive mortgage deals.
"Reflecting this recovery, we estimate lending this year to reach £214 billion, up from our earlier estimate of £209 billion. Looking ahead, upside potential appears limited as a result of affordability pressures and new supply challenges which will continue to weigh on activity."
Steve Griffiths, Head of Sales and Distribution at Kensington, commented:
“This nominal dip in mortgage lending compared with October’s figures is reflective of the seasonal fluctuations in the market which we tend to see in the run up to Christmas. That said, lending is still significantly up on last year as the combination of low inflation, low rates and rising wages has enabled more people to raise a deposit and get a foot on the property ladder. Economic conditions have clearly boosted people’s affordability, however it is also important to judge the health of the market by the way it caters for a diverse range of customers rather than just the top-line number.
“Identifying the needs of different groups of customer demographics and access to the mortgage market is particularly important given the current scale of house price inflation. For many, real life doesn't fit a standard mortgage application due to the nature of their income or credit history. The FCA’s review into competition in the mortgage market will hopefully flag the importance of a diverse market that provides different types of borrowers the opportunity to access homeownership."
Jeremy Duncombe, Director, Legal & General Mortgage Club, said:
“Despite this slight drop in lending compared to October, the mortgage market has still seen an exceedingly strong second half of the year. Favourable economic conditions and an increased demand for properties have driven lending in recent months. However, the lack of supply continues to constrain market activity, pushing up house prices and prompting people to take on larger loans in order to get onto the property ladder.
“At Legal & General, our lending figures have consistently been up on last year for each month of 2015. Compared to the CML’s figures, this strong performance suggests that the proportion of lending submitted through intermediaries is increasing, and is now understood to account for around 70% of the overall mortgage market. It’s excellent to see that brokers’ ability to adapt to new regulation and proactivity in approaching prospective buyers is enabling them to increase their market share, whilst providing consumers with greater access to full advice in the process.”
Henry Woodcock, Principal Mortgage Consultant, IRESS, added:
“Winter may be unseasonably warm, but the mortgage market appears to be cooling, with disappointing lending figures for November in comparison with the rest of the year. The seasonal slowdown heading towards Christmas has clearly taken its toll already, as consumers focus more on holiday spending and the supply of houses coming onto the market diminishes.
“Despite this, 2015 has been a good year for overall growth in the mortgage market, and we expect a strong start to 2016. Although the Bank of England will be applying greater scrutiny to buy-to-let, we expect this sector of the market to support overall mortgage lending in the first quarter, as prospective landlords rush to beat the April deadline following the Chancellor’s changes to stamp duty for investors.”
