According to the latest Council of Mortgage Lender’s (CML) market commentary, gross mortgage lending reached £20.5 billion in September, which is an increase of 2% in comparison to the same month last year.
Report highlights also included:
- Lending figures bolstered by re-mortgage activity
- Economic recovery
- Interest rates may not be cut again soon
The industry is waiting for hard data detailing the impact of the referendum and how the UK economy, in particular, gross domestic product, is fairing. The National Institute of Economic and Social Research’s estimate, which is due out soon, includes these figures and we’re eager to see if their estimate of 0.4% will be accurate and will signal an economic recovery.
As a depreciated sterling value has pushed up import prices, inflation has risen to 1% and will most likely hit the Bank of England’s 2% target by the end of 2017.
The CML reported that: ” It is not clear whether the Bank will move to cut rates as it comes down to whether the medium term outlook in November is judged to be broadly consistent with the August Inflation Report projections. While short-term indicators looks more positive, the Bank will be looking further down the line to make its decision.”
The Royal Institution of Chartered Surveyors survey has recently reported an increase in new buyer enquiries for the first time since February this year. However, there continues to be a lack of properties for sale. The housing white paper (outlining housing plans until 2020) is due by the end of this year and will hopefully address this pressing issue.
House purchase approvals fell to a 21 month low, with just over 60,000 approvals in August, however, this is still more positive than the predicted 56,000.
Buy-to-let mortgage lenders have been tightening affordability criteria in anticipation of the forthcoming interest tax relief changes in April 2017 and the Prudential Regulation Authority’s stress tests, which come into effect in January 2017.
Henry Knight, Managing Director, Springtide Capital commented: “Gross mortgage lending is mainly bolstered by re-mortgage activity at present, most likely driven by extremely competitive mortgage rates. However, as advisers, we’d like to see house purchases moving in the right direction too, which means increasing the supply of affordable properties.
“We anticipate that buy-to-let landlords will take advantage of current regulation prior to changes in criteria in 2017, which may distort lending figures a little in coming months.”