Gross mortgage lending 14% higher year-on-year


According to the latest UK Finance Update on Lending, gross lending is estimated at £23.1 billion for October, 14% higher than a year ago.

Other highlights from the report included:

  • £15.3 billion was lent by High Street banks
  • 7.1% credit outstanding


The UK has experienced a muted first half of the year, and the same can be said of the second, with growth at 0.4%. However, the unemployment rate remains low at 4.3%.

As predicted, inflation reached 2.8% in October, however, according to UK Finance, “inflation is likely to peak in October, before starting to fall.” Consumer spending continues to feel the pinch as wage packets are squeezed with higher prices and lack of wage growth: with households trading down and focussing on essential purchases.

The Monetary Policy Committee met on 2nd November and decided to raise interest rates by 0.25% to 0.5%; this has meant the withdrawal of historically low-rate deals.


Remortgage activity and first-time buyers have been the main contributors to October’s mortgage lending, with an estimated £23.1 billion borrowed, an increase of 14% year-on-year. Two-thirds of money borrowed was from High Street banks, at £15.3 billion.

Outstanding credit grew slowly in October, sitting at 7.1%.

Commenting on the data, UK Finance’s Senior Economist Mohammad Jamei said: “The anticipated bank rate rise saw a flurry of remortgage activity as many homeowners took advantage of the competitive rates on offer. Borrowing was also boosted by stronger first-time buyer activity as this segment reaped the benefits from good credit availability, lower rates and government housing schemes.

“In terms of saving, consumer deposits grew at a slower rate in October, while businesses have continued the trend of bolstering their cash reserves amidst a cautious business landscape due to Brexit uncertainties.”


Landlords with four or more mortgaged buy-to-let properties will now be classed as ‘Portfolio Lenders’ and subject to a different and more rigorous assessment when applying for a buy-to-let mortgage.

Lenders are now responding to rules given by the Bank of England’s Prudential Regulation Authority (PRA), which is enforcing stricter stress testing for Portfolio Landlords to ensure affordability, by introducing new systems and more complicated underwriting processes. Lenders will now need to assess the financial viability of every property in a landlord’s portfolio when deciding whether to offer them a loan. Landlords will need to show mortgage details, cash-flow projections and business models for every property they own when applying for a new loan.

When Portfolio landlords apply for new borrowing or to remortgage, they will need to ensure that each property’s monthly rental income covers 125% of their mortgage payments, which is stress tested at an interest rate of 5.5%.


  • The Chancellor has promised £44bn in capital investment to boost the housing market and
  • 300,000 homes to be built every year by mid-2020s;
  • Mr Hammond has abolished stamp duty for all first-time buyers for homes up to £300,000,
  • and there are plans to allow councils to charge a 100pc premium on council tax on empty properties.

An overview of the key housing market changes announced in the budget can be found here.

Henry Knight, Managing Director, Springtide Capital commented: “There has certainly been a ‘flurry’ of activity due to the predicted rate rise, with homeowners looking to secure favourable rates. The Chancellor’s plans to address the housing shortage are promising, as is the removal of stamp duty tax for first-time buyers up to £300,000.

“I’d like to stress that it’s essential that Portfolio Landlords understand how they will be affected by the new PRA rules; and which lenders are best suited to provide their buy-to-let funding. I would recommend that Portfolio Landlords seek advice from a buy-to-let mortgage consultant.”