Tag Archives: Houses

Gross mortgage lending down 5% year-on-year

Henry Knight, Director, Springtide Capital

Henry Knight, Director, Springtide Capital

According to the latest Council of Mortgage Lender’s (CML) market commentary, gross mortgage lending reached £20.6 billion in October, which is a decrease of 5% year-on-year.

Report highlights also included:

  • Economy holding up better than expected
  • Monetary Policy Committee (MPC) left interest rates unchanged


Economic data has now revealed that the UK’s post-referendum economic landscape is stronger than expected.

The Office for National Statistics (ONS) reported that the economy has grown by 0.5% compared to the three months to June. In addition, the ONS also reported that unemployment rate fell to 4.8% and that inflation has dipped to 0.9%. In response to this, the Bank’s November Inflation Report, expects inflation to reach 2.7% by the end of 2017.

The Monetary Policy Committee (MPC) voted to keep the interest rate at 0.25%.


Gross mortgage lending in October totalled £20.6 billion and is 5% lower than October last year (£21.8 billion).Gross lending for the whole of 2016 will be between £240-245 billion, which would represent a 10-12% rise compared to 2015.

Better than expected, house purchase approvals reached nearly 63,000, prompting the Bank of England to revise up its forecast for approvals from 56,000 to 65,000.

Finally, tightened affordability criteria and recent stamp duty changes have meant softer buy-to-let activity overall. The mix of lending has slowly moved towards remortgage activity, accounting for 40% of lending against a third in recent years.

Henry Knight, Managing Director, Springtide Capital added: “It’s great to finally see data detailing that the UK’s economy is stronger than expected as this will perhaps allay fears of economic uncertainty in the market. However, the lack of available properties now seems to be compounded by subdued home-mover activity meaning demand continues to outstrip supply.”

Commenting on market conditions in this month’s market commentary, CML senior economist Mohammad Jamei said:

“The housing market has continued to fare better than many expected, with survey indicators still painting a relatively positive picture. The Royal Institution of Chartered Surveyors survey showed demand holding up well.

“The problem is that this demand is still not being met with a supply response. New instructions to sell have fallen, or been relatively flat for more than three years now. This has led to the average number of properties per surveyor falling to its lowest level for nearly 40 years.The impact of this is that it limits the number of potential transactions, as well as pushing up prices, as the relatively few properties up for sale are bid up by a growing number of buyers.”

If you would like to speak to a Springtide Capital mortgage broker please call 020 3040 4400.


Source: https://www.cml.org.uk/news/news-and-views/market-commentary-november-2016/