Gross mortgage lending totalled £12.9bn in September

Gross mortgage lending totalled an estimated £12.9 billion in September, report the Council of Mortgage Lenders.

Related topics:  Mortgages
Millie Dyson
20th October 2011
Mortgages
This represented a 2% decrease from the £13.1 billion lent in August but was 4% higher than September 2010 (£12.4 billion).

Gross lending for the third quarter of 2011 was therefore an estimated £38.6 billion, a 15% increase from the second quarter of this year (£33.5 billion) and a 2% increase from the third quarter of 2010 (£37.9 billion).

In today’s market commentary, CML chief economist Bob Pannell observes:

"Both house purchase and remortgage lending appear to have fared well in September, but this is against the backdrop of subdued levels of activity.

"However, short-term economic prospects for the UK are not favourable. The housing market is very sensitive to wider household confidence, and this seems likely to weaken over the coming months in response to the latest spike in consumer prices and headline unemployment figures."

Duncan Kreeger, chairman of West One Loans, said:

“High street lenders are retreating from the market or only targeting very wealthier borrowers. 

"That’s created a lending void, particularly for people who want to invest in buy-to-let property. They are turning to bridging lenders to fill that void. 

"While gross mortgage lending is effectively stagnant, gross bridging lending has risen 46% in the last year and, according to our forecasts, will hit £800m by the end of 2011. With mortgage lending so painfully subdued, bridging finance is providing the lifeline that private investors and buy-to-let landlords need.”

David Whittaker, managing director of Mortgages For Business, said:
 
“The cocktail of record low interest rates and record high inflation has made the prospect of saving for a deposit as realistic as finding a pot of gold at the end of a rainbow.

"This, and the impact of low overall economic confidence, is reflected in subdued overall lending in the traditionally busy early autumn period when the market is usually dominated by owner occupiers buying and selling after the summer break.

"Many will take cheer from the fact that the year-on-year figures show solid growth in lending levels, but this rise has been driven by professional investors and buy-to-let borrowers.

"While property prices stagnate and rental demand increases at an ever increasing rate, it is landlords and professional investors who will continue to enjoy a purple patch and prop up the rest of the market.” 

Paul Hunt, managing director of Phoebus Software said:

“Despite the modest fall in lending seen in September, the quarterly and annual improvement shows how resilient the market has been to the economic challenges it faces. There are plenty more economic hurdles to jump before we will see a significant and sustained recovery in lending.

"But the fact that lenders have not retreated into their shells shows they are still seeking to boost lending wherever possible and this has supported the housing market, preventing larger falls than we have seen in the course of the year.

"Lenders have responded to the prospect of a low base rate in the long term by offering their lowest ever rates. Although this did not cause lending to rise last month, it has prevented larger falls and is a consequence of continuing confidence in borrowers’ finances and the UK housing market”.


Alex King, director of independent mortgage broker, SPF Private Clients, said:

"A slight retreat in September but the Q3 figure is mildly encouraging. But as the CML rightly observes, soaring inflation and rising unemployment do not inspire confidence among consumers.

"We're beginning to see a gradual correction in the pricing of mortgages, as the volatility in the wholesale lending markets translates into slightly more expensive terms for borrowers.

"But while rates are experiencing a degree of upward pressure, the volatility in the markets has not yet resulted in stricter lending criteria as we saw during the financial crisis of 2008/2009.

"Mortgages are still more readily available than at any time post crisis although we are closely monitoring lending criteria for any signs of a hardening.

"The longer the Eurozone's problems go unresolved, the more likely it is that lending criteria could tighten and rates could rise as the perception of risk grows.

"Gross UK mortgage lending peaked at £362bn in 2007 before it went off a cliff, falling to £135bn by the end of 2010, which is broadly where it will be in 2011. However, to think we will see a repeat of the scale of the correction of 2008/2009 is unrealistic.

"In the short- to medium-term, the property and mortgage markets will continue to bump along at historically low levels. Given the ongoing and very real threats to the global economy, the flat market we're in is no bad thing."

Richard Sexton, director of e.surv chartered surveyors, said:

“With inflation so high, the year-on-year rise is actually little to celebrate. The reality is mortgage lenders are actually retreating from high loan to value lending.

"Their confidence has been further dented by the economic crises that is running amock in eurozone, and by the cracks beginning to appear in the government’s growth strategy.

"With the supp
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