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Housing market reaches a plateau


According to the Council of Mortgage Lender’s (CML’s) latest market commentary report, gross lending increased to £22.1 billion in June, up 9% on May and 3% on June last year.

Other report highlights included:

  • Activity and lending flat since the start of the year
  • Reduced consumer expenditure, which may become more acute against a challenging economic outlook
  • Home-owner remortgage activity and first-time buyers supporting lending


CML’s report states that the economy has slowed in the first half of 2017, with growth expected to track at half the rate of recent quarters. In the first three months of 2017 growth was 0.2%, and the three months to June is expected to be 0.3%.

Unemployment continues to remain low at 4.5%. Due to weak growth in wages at 1.8%, workers spending power is being eroded by inflation, with the Consumer Price Index at 2.6% in June.

The CML report continued to add that “A number of Bank of England monetary policy committee (MPC) members have recently voiced their opinions on raising interest rates. Despite this, a rate increase when they next meet in August seems unlikely as inflation is currently in line with the MPC’s expectations as set out in May’s Inflation Report.”


The economic backdrop has meant that the housing market has reached a plateau, with activity and lending flat since the start of the year.

Property transactions averaged 100,000 during recent months, however the recent weakening in house purchase approvals – a leading indicator of activity – could mean fewer transactions in the months ahead.

Henry Knight, Managing Director, Springtide Capital added: “The mortgage market has had a variable 2017 so far. Compared to late 2015 and early 2016 when all areas of transactions were growing, it’s clear that first-time buyers continue to drive house purchase activity. This is a trend that is likely to continue over the coming months and is the first time since 1996 that first-time buyers have exceeded movers. Although the under­lying market is healthy, uncertain economic and political conditions have resulted in an increasing number of borrowers tightening their budgets. Generally speaking, the latest data suggesting a lacklustre housing market and predictions that the Bank base rate could rise from its historic low of 0.25 per cent, gives us a good indication of how future transactions may develop in the second half of 2017.”

If you’d like advice on obtaining a mortgage, simply call Springtide Capital on 020 3040 4400 to book an appointment with an adviser.

Gross lending hits £20.7 billion in June


Following the EU referendum, the Council of Mortgage Lenders (CML) issued their market commentary, estimating that gross mortgage lending reached £20.7 billion in June. This is 16% higher than May’s lending total of £17.8 billion, and 3% higher than the £20.1 billion lent in June last year. This is the highest June figure in eight years when gross lending reached £22.6 billion in 2008.

It is expected that the result of the EU referendum will have an impact on the housing market, however, the extent is yet unknown. The general view is that uncertainty will create a wait-and-see attitude and dampen housing price growth. You can read Henry Knight’s view here.

Not surprisingly, it is expected that lending over the coming months will be dominated by remortgage activity as opposed to house purchases.

The economy

The new Prime Minister, Theresa May, will be tasked with triggering Article 50 of the Lisbon Treaty, although she has stated that it will not be this year. The Prime Minister has already appointed new members of her cabinet, built to deliver her vision of leadership for the UK.

Despite speculation, the Bank of England has held interest rates at 0.5%.

The Bank of England has said: “Most members of the committee expect monetary policy to be loosened in August. The precise size and nature of any stimulatory measures will be determined during the August forecast and Inflation Report round.”

According to CML, “Economic growth in the first quarter of 2016 was unrevised at 0.4%, according to the Office for National Statistics’ second estimate. Survey data indicates that this subdued rate of growth is set to continue into the second quarter of 2016, partly as businesses postponed investment decisions until after the vote.

“Forecasters had already revised down growth expectations for the UK economy to around 2% for 2016, but even this figure is likely to be revised down further as the period of economic uncertainty extends.”

The inflation rate remained at 0.3% for the second month in a row in May, driven by a fall in the price of clothing and food, but is expected to rise in the second half of the year.


Lending figures are still distorted by the stamp duty change on second properties, this together with the uncertainty caused by the EU referendum, may show a lengthened downside to transactions as opposed to a dramatic one.

CML added: “And while this uncertainty will linger for some time, house prices remain underpinned by sound fundamentals.

“…the characteristics of the UK housing market are unlikely to change dramatically in the near term, as there will continue to be a mismatch of supply and demand, stretched affordability and a relatively low number of home movers.”

Henry Knight, Director, Springtide Capital commented: “We won’t be able to see the full extent of the impact of the EU referendum result for some months. Those who were in the middle of buying or selling a property would have no doubt continued progressing their sale or purchase following the referendum. Properties continue to go on the market and there is a strong demand for them – who knows, it may even result in people wishing to sell their property prior to any exit from the EU.

“Dampening housing price growth against what was an unsustainable rate of increase will help first-time buyers to afford properties. I’m sure that the housing market has challenging times ahead, but this may not be felt as soon as people may have thought. For Springtide Capital, it is very much business as usual.”

Please call one of our advisers on 020 3040 4400 if you would like any further information.
















Managing Director of Springtide Capital, Henry Knight, reflects on recent events


As the UK digests the ‘Leave’ vote following the EU referendum, it’s fair to say that behind the scenes  the financial world has been busy understanding the consequences. Henry Knight, director, Springtide Capital addresses some of the main concerns within the mortgage market.

House prices

Henry Knight, Managing Director at Springtide Capital sends a message of reassurance,

“We are clearly in for a period of uncertainty whilst the markets rebase themselves.  However, I’d like to express my personal opinion that although there may be a small correction in house prices, this is set against the fact that we have been in a market with continual price increases. Therefore, the rational outcome would be for an overall flattening of the annual rate as opposed to great reductions. Buying a home or even an investment property in most cases is a long-term decision, not one based on growth over a short period.”

Mortgage rates

Henry has also highlighted that it is unlikely that the base rate will increase, with Bank of England’s Mark Carney recently stating that quantitative easing would be back on the agenda to sure up the economy if required – potentially lowering rates even further to stimulate or stabilise.

We can, however, expect some tightening in lending, which may mean that 95% loan-to-value (LTV) deals aren’t as competitive. It’s also likely that banks will continue to seek out clients at 60-70% LTV, where pricing can be expected to remain strong.

Bank liquidity

Henry continued by saying that, “Liquidity within the banks was significantly bolstered following the last financial crash, ensuring that banks are in a far more secure position to withstand this type of event. Therefore, it would seem reasonable to assume that it shouldn’t be a major issue unless there was a very significant market drop over a sustained period (25%+).


We appreciate that uncertainty is always unsettling, especially if a person is in the process of selling or buying a property, but we’d encourage everyone to take a longer term view.

If you read ten different press articles, you’re likely to receive as many different views on the topic – many experts are making educated guesses at best, therefore kneejerk reactions are not recommended. In fact, many mortgage holders are likely to be able to take advantage of cheaper mortgage rates in the coming weeks as banks will continue to have an appetite to lend.

Moreover, it will take time for the full consequences of a ‘leave’ vote to be revealed and for the government to begin to pave the way for the future – we have to be patient.

Please feel free to speak to one of Springtide Capital’s qualified Mortgage Consultants for further information and guidance on 0203 0404400.