Gross mortgage lending up 30% in 2013

There was an estimated £17 billion of gross mortgage lending in November, according to the Council of Mortgage Lenders.

Related topics:  Mortgages
Amy Loddington
19th December 2013
Mortgages

This was 4% lower than October's figure of £17.6 billion but 30% higher than the £13 billion lent in November last year.

CML chief economist Bob Pannell said:

"Gross lending for 2013 looks set to reach £170 billion - higher than the £156 billion we originally forecast, but still a far cry from the £363 billion experienced at the height of the lending boom in 2007. New rules hardwire in a more risk-averse lending environment for the future and so, while we expect lending to rise in line with better economic conditions, the next two years are unlikely to see lending levels getting very far above £200 billion a year."

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

“2013 is set to finish on a high note as lending for the year is expected to smash forecasts, with November seeing twice as many High LTV borrowers than the same month last year. However even this still falls short of the soaring heights we saw in 2007, showing there is still room for manoeuvre.
 
“As we’re starting to see already the recovery in lending is starting to decelerate but we believe will quickly pick up again in the New Year. The initial hype surrounding Help to Buy 2 will likely begin to simmer down and as FLS is pulled away the rates charged to borrowers could  tick upwards as a result.  Counter to this  however, is the fact that new regulations set to come into force in April may encourage lenders to build a pipeline to offset any slowdown.
 
“Looking longer term, with a growing price tag for houses in the run-up to Christmas and more buyers entering the market, building drastically more homes next year will be of the utmost importance. Speed will certainly be of the essence. Because even with Help to Buy carrying the torch, unless more homes are built. the next wave of aspirational homeowners could find themselves seeing the ladder pulled away if prices rise beyond the grasp.”


Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association, comments:

“Today’s CML figures and analysis show how far the mortgage market has changed in 2013, buoyed not least by a clear commitment from the highest levels of government to make getting a mortgage a far more realistic proposition than during the recession. The Funding for Lending Scheme and Help to Buy have been important factors in stimulating market confidence and expectations. Indeed the planned withdrawal of FLS support in 2014 and the lack of market reaction to this are clear indications that wider conditions have improved, and mortgage lending can now continue to grow under its own steam. Indeed IMLA’s view is that the market in 2013 will exceed the £170 billion set out in the CML figures.

“The fact that greater lending volumes have been achieved this year while at the same time mortgage arrears and repossessions continue to fall would suggest that a responsible, risk-adverse approach is now more deeply engrained in the market’s culture. With the new rules under the Mortgage Market Review (MMR) coming into force in April 2014, it will be important to retain the balance between tighter controls and the real and still unmet homeowner ambitions that remain across the UK.

“Questions still need to be answered during 2014 – including what the new ‘normal’ will look like for the mortgage lending market,  what funding is needed to support it, and who will be inside this new market or outside of it. Until the situation becomes somewhat clearer we will not know what levels of homeownership the market can support and what role government must play. Despite this we end the year on a good note.”

David Copland, Director of Mortgages at LSL Property Services, said:

“While we all expect an increase in the numbers at the moment, the significance of a 30% year on year rise in mortgage lending indicates that there is still a lot of pent up demand in the market at the moment.  With big pipelines going in and the market working right up to the Christmas break I expect it to continue through until April when the MMR will shake everything up with longer transaction times and tighter criteria.

“I do think that the CML’s forecast of a market not exceeding £200bn is overly pessimistic however.  This year’s market has exceeded even the most optimistic of forecasts and, despite the MMR, I expect next year’s to do the same.”

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