Mortgage lending in UK up after summer dip

Gross mortgage lending in the UK reached £20 billion in September, up 2% from the previous month and up 12% year on year, the latest figures show.

It is the fourth month in a row that there has been a sharp improvement in year on year lending, says the report from the Council of Mortgage Lenders.

Gross lending in the third quarter of 2015 was therefore an estimated £61.4 billion some 18% higher than the £52.2 billion advanced in the second quarter, and an increase of 12% on the third quarter in 2014, when lending totalled £55 billion.

‘Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pickup in activity in the housing market after a slow start to the year,’ said CML economist Mohammad Jamei.

‘Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand. We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first time buyers,’ he added.

According to Henry Woodcock, principal mortgage consultant at IRESS, buoyant house purchase lending, paired with a buy to let mortgage market at its strongest level for two years has sustained momentum.

‘On top of this, the number of mortgage products available is at an all-time high, providing consumers with far more choice and a healthy remortgage market are all combining to create a real buzz,’ he said.
 
‘With speculation around an interest rate rise dying down and unlikely to happen until the first half of 2016, consumers should benefit. Historically attractive rates will be available for longer, continuing to support buyer demand,’ he added.

John Eastgate, sales and marketing director of OneSavings Bank, also believes that it is the buoyancy in the market supported by persistently low mortgage rates that is boosting lending.

‘The recent global economic uncertainty has caused central bankers to hit the pause button on possible rate rises, with many speculating that the UK may not see rates increasing before late 2016. House prices also grew at their slowest rate for two years last month, and if this trend continues, should ease affordability issues for buyers,’ he explained.

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Source: Property News Spain