However, the CML noted that lending appears to be in the throes of an incipient recovery.
Mohammad Jamei, CML economist, commented:
"Although lending in April was fractionally down on the previous month and year, this followed a stronger March. Overall, we now seem to be on the cusp of a modest lending recovery. Household finances are generally improving as earnings growth continues to outstrip inflation, and mortgages are being offered at extremely competitive rates. As a result, we expect to see stronger lending in future months."
Lucy Hodge, Director, Vantage Finance, said:
“The run-up to a General Election is always a period of uncertainty for mortgage lending. In April, this was compounded by predictions of one of the closest elections on record and fears of mansion and non-domicile taxes. The decrease in gross mortgage lending is therefore unsurprising.
“The result of a Conservative majority government has given clarity to the market and with property companies already reporting a surge in interest post-election, we expect to see a return to growth in the mortgage lending sector as we move into summer.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, added:
“There’s no doubt that pre-election jitters took their toll on borrower demand in April, but the mortgage market hardly ground to a halt. Mortgage rates remain near historic lows, and this continues to drive underlying activity. On top of this, we have seen deflation take hold, pushing back the prospect of a hike in interest rates. Combined with improving earnings, this will boost the borrowers' budgets.
“With the new government now in situ, any lingering uncertainty has been put to bed, and sentiment has undergone a palpable bounce. There are already signs that mortgage activity is on the increase, with big ticket purchases returning, and the market expects positive momentum to build as the year progresses. Yes, affordable mortgages for those with the smallest deposits remain thin on the ground, holding back first time buyer levels, but an increasingly buoyant buy to let market will support total lending in 2015.”
Henry Woodcock, Principal Mortgage Consultant, IRESS, said:
“Prospective borrowers played a waiting game ahead of the most unpredictable General Election for almost a century. This put the brakes on market activity in the month, undoing much of the progress in lending volumes seen in March. Nevertheless, we do not see this slow down becoming a long term trend. The signs continue to point towards a market that is set to grow during the rest of the year, underpinned by a strengthening remortgage market, and the diminishing likelihood of interest rates rising. With the mortgage price war intensifying and long-term fixed rates reaching record lows, borrowers are reaping the benefit, sustaining demand. Equally, we should see upwards pressure on activity as the effects of stamp duty reform trickle through this year.”
