Gross mortgage lending for the third quarter of this year was therefore an estimated £55.5 billion. This represents an 8% increase from the second quarter of this year, and a 13% increase on the third quarter of 2013 (£49.2 billion).
Commenting on market conditions in this month’s Market Commentary, CML chief economist Bob Pannell observes:
“Uncertainty over when we will see the first increase in UK base rates is exacerbated by weaker growth prospects in several major economies, including the eurozone.
“Recent indicators and policy actions corroborate our view of a gentle easing in market conditions. There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau.”
Henry Woodcock, Principle Mortgage Consultant, IRESS, said:
“Recent signs on the ground have pointed towards the brakes being applied to housing market activity, and this has been reflected in today’s lending figures. Climbing house prices have proved a cause for concern for prospective new buyers and lenders alike, and the impact of this has been exacerbated by the ongoing operational problems called by the MMR in April, not to mention fears of a restriction on loan to income multiples.
"While caution and prudence may be watchwords in the current market, we are not likely to see a prolonged depression in the mortgage market. As lenders look to hit targets for the end of the year, mortgage rates are being pushed down. With interest rate hikes now unlikely to rise as soon as first thought, the cost of servicing a mortgage is not going to soar any time soon. This in turn will continue to stimulate demand from buyers."
Andy Knee, chief executive of LMS said:
“The overall picture of the housing market shows that lending is still up from last year, but stricter lending criteria and increasing apprehension surrounding affordability has led to a slight slowing of the market with lending down by 1% from last month.
“This further evidence of a cooling in the market should provide some much needed relief for first-time buyers who could experience reduced competition in purchasing a home and a slower ascension of house prices as a result. Lender appetite also remains healthy, as long as hopeful buyers meet their lending criteria.
“However, buying a house remains no mean feat and for more people to stand a chance of entering the market place, schemes such as Help to Buy are critical in offering a helping hand to get more young people onto the property ladder. Assistance to aspirational first-time buyers has therefore improved their chances of buying a home but should not be curtailed too soon.
“The situation for home owners hoping to secure a new mortgage has also improved, as with house price rises, fewer are trapped by the burden of negative equity. Many previously limited by their current deals have seen their options improve no end. Remortgagors should consider taking advantage of the lower rates available to them now as uncertainty ahead of the election and the prospect of a base rate rise early next year may reduce the competitive offers and limit lender appetite.”
Paul Hunt, Phoebus Software managing director, said:
“A drop in lending figures this month seems to indicate that the UK lending market has certainly passed its peak this year. With a general election in May next year it is unlikely that we will see a resurgence before then. So I think that over the next 6 months we will get used to seeing more subdued figures each month. However, a look back to last years’ figures which were 10% lower shows that we are still in a significantly better place, and a corresponding stabilisation in house prices may enable many aspiring home owners to pause for breath.”
