Mortgage lending highest since August 2008: CML

The Council of Mortgage Lenders estimates that gross mortgage lending reached £19.1 billion in July.

Related topics:  Mortgages
Amy Loddington
20th August 2014
Mortgages

This is 7% higher than June (£17.9 billion), 15% higher than July last year (£16.7 billion) and the highest monthly figure since August 2008 (£19.3 billion).

Commenting on market conditions in this month’s Market Commentary, CML Market and data analyst Caroline Offord observes:

"Mortgage activity seems to have remained robust following the regulatory changes but the eventual impact of these remains uncertain.

"Property transactions in the first half of the year showed a 25% increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect that intensifying affordability pressures could start to dampen this upwards trend.

"Economic conditions have strengthened but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged."

Henry Woodcock, Principle Mortgage Consultant, IRESS, said:

“It’s clear that the market may have found its footing and is striding forwards following the introduction of the MMR. However, there are real question marks over whether this growth can be sustained for the remainder of the year.  A combination of rising house prices, fears of an interest rate hike and tougher lending conditions  is denting confidence among new buyers, and we expect this to accentuate the seasonal summer slowdown. With London in particular showing signs of slowing growth, we may see the frantic pace in the housing market decelerating – a trend that will continue if rates are hiked earlier than forecast.
 
“However, that’s not to say activity is about to plummet. First-time buyer enthusiasm, aided by Help to Buy, remains strong among those able to access finance, while the buy to let sector will continue to underpin lending in the long-term as the UK’s need for accommodation continues to climb.”

Jeremy Duncombe, Director, Legal & General Mortgage Club, comments:

“The increased housing market activity since January has led lenders to raise projections of what they will lend this year.  For the first time since 2008, the Council of Mortgage Lenders expects that more than £200bn will be lent by the end of this year. Certainly from our recent conversations with lenders, they are confident they have the capacity and also the appetite to meet this extra demand.
 
“With confidence returning to the economy, we expect a new normal level for lending to be around £240bn to £250bn per year, with much of this coming from the intermediary channel as lenders’ distribution models evolve.”

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