Mortgage lending hits highest level since Oct 2008

The Council of Mortgage Lenders estimates that total gross mortgage lending in May increased to £14.7 billion, representing a rise of 21% from £12.2 billion in April and 17% higher than the total of £12.6 billion in May 2012.

Related topics:  Mortgages
Amy Loddington
20th June 2013
Mortgages
This is the highest monthly estimate for gross mortgage lending since October 2008.

Commenting on market conditions in this month's Market Commentary, CML chief economist Bob Pannell observes:

“The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.

“Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.

“While the direction of travel is clear and fits well with the more positive housing surveys from RICS and others, our forward estimate does imply somewhat stronger house purchase activity than we had been expecting. This may reflect a degree of pent up sales following the extended spell of poor weather earlier this year”.

Ben Thompson, MD Legal & General Mortgage Club, commented:

“The welcome increase in mortgage lending that we witnessed last month is, at least in part, due to increased confidence on the back of the Help to Buy scheme. This spike in lending to first-time-buyers is a trend that we expect to see continue for a number of months as market conditions improve and lenders start to increase their appetite to lend.
“Whilst confidence does have regional variations, the market as a whole is moving. There are more deals appearing at Higher Loan to Value, but it’s important that customers speak to an adviser to find the product that best suits their personal circumstances.”

Sophie Hall, Head of Intermediary at Avelo, comments:

“It is evident that the mortgage market has come a long way this year, with government schemes such as Help to Buy and Funding for Lending stoking the fire. The housing market has been bubbling away in recent months and confidence is returning among many prospective buyers, and lenders are continuing the progress we have seen in the first part of the year.

"While there is certainly more that can be done to offer first-time buyers a broader range of options – especially at higher LTVs, demand for mortgage finance is heating up in reaction to rock-bottom interest rates and improved prospects for house prices. All this bodes well for mortgage brokers, and if the trend of improvement continues, buy-to-let won’t be the only part of the market seeing strong growth this year. ”
More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.