Tag Archives: Mortgage lending figures 2016

Gross mortgage lending reaches £20.4 billion in December, up 4% year-on-year

 

According to the latest Council of Mortgage Lenders’ (CML) Market Commentary, gross lending for December was estimated at £20.4 billion.

In fact, lending during 2016 was up 12% year-on-year in comparison to 2015, finishing up at £246 billion in total.

Other report highlights included:

  • Marginally higher property transactions in 2016 at 1.23 million
  • Buy-to-let sector lending lower compared to a year ago
  • The Housing White Paper will deliver homes in 2018 onwards

THE UK ECONOMY

The economy fared well in 2016, with 2.1% growth overall, supported by low unemployment at 4.8% and growth in weekly earnings at 2.8%.

Still below the Bank of England’s target of 2%, inflation reached a two-year high in December of 1.6%. However, the CML expects this to increase as food, energy and import prices rise. This forecasted increase is the reason for lower forecasted growth in 2017, as consumer spending decreases from pressure on earnings.

HOUSING MARKETS

The UK mortgage market ended 2016 at a healthy £246 billion, despite the ups and downs during the year including an acceleration in buy-to-let transactions in March before the stamp duty change and the post-change slump in activity. Brexit also caused a summer slump in activity, with confidence then returning towards the end of the year as the Bank of England took action – a roller-coaster to say the least.

First-time buyer activity continued to increase during 2016, reaching 337,000 in the 12 months to November 2016, according to the CML report. There were 1.23 million property transactions in 2016, slightly higher than 2015.

The re-mortgage market gained pace in 2016, as competing lender rates and a low interest rate incentivised activity.

The market is still being held back by the lack of available and affordable property, an issue which the Housing White Paper is set to address. However, it is unlikely that this will come to fruition until 2018.

Henry Knight, Director, Springtide Capital commented: “2016 was not only an historical year but has shown how resilient we are as a country, with the Bank of England coming into action to allay fears and bolster the economy. All in all, 2016 was a good year for mortgage lending, despite the political and regulatory cards that were dealt. That said, the changes to stamp duty and buy-to-let taxation have had a particularly negative effect on the London market.”

 

If you would like to speak to a Springtide Capital Mortgage Consultant please call 020 3040 4400.

 

Source: https://www.cml.org.uk/news/news-and-views/market-commentary-january-2017/

 

Mortgage lending hits £20.5 billion in September

 

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 ECONOMY

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.”

HOUSING MARKETS

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.”