February gross mortgage lending largely unchanged

Gross mortgage lending in February was an estimated £9.5 billion, according to new data published by the Council of Mortgage Lenders.

Related topics:  Mortgages
Millie Dyson
18th March 2011
Mortgages
This is almost identical to January's gross lending figure of £9.475 billion and marginally (less than 1%) higher than the £9.419 billion in February 2010.

Although lending remains weak overall, stronger remortgage activity has continued into the early months of 2011. While there has been a seasonal pick-up in house purchase demand over recent weeks, this appears to be weaker than a year ago despite the fact that there was a lull at the start of 2010 following the expiry of the (earlier) stamp duty concession at the close of 2009.

Commenting on today's gross lending figure, CML chief economist Bob Pannell said:

"There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011, and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market.

"The housing market remains stuck in a rut and, while we do not anticipate much relief in next week's Budget, it does present an opportunity for the chancellor to address the reform of stamp duty.

"What we have instead is the introduction of a new 5% band. That is an irrelevance for the majority of home-buyers but another indication of the haphazard and arbitrary nature of this tax, where reform is long overdue."

Brian Murphy, head of lending at Mortgage Advice Bureau comments:

"The stand-out trend in the mortgage market at present is the increase in the number of rate-wary borrowers remortgaging onto fixed rates.
 
"People know that rate rises are coming and they are locking in now before fixed rates move higher. Essentially, borrowers are running for cover.
 
"Unsurprisingly, the mortgage market as a whole is flat. You only need to look at the latest Nationwide consumer confidence index to see why.
 
"Consumer confidence is in tatters and until prospective buyers feel safer financially the mortgage and property market will remain stuck in a rut.
 
"This week alone we saw unemployment rise further and people know that the worst is still to come given that many of the public sector job cuts have yet to be implemented.  Next week's Budget will also have been weighing on people's minds.
 
"2011 is shaping up to be a very challenging year for both the property and the mortgage market."

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