Liquid error: wrong number of arguments (2 for 1) Property Wire: Gross mortgage lending in UK jumps 8% month on month | Marsh & Parsons Sales and Lettings Estate Agents London

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Property Wire: Gross mortgage lending in UK jumps 8% month on month

Fri 20 Nov 2015

Gross mortgage lending in the UK reached 21.8 billion in October, some 8% higher than the previous month,according to the latest estimates from the Council of Mortgage Lenders.

In addition to the month on month rise, lending rose 19% year on year, from 18.4 billion in October 2014, thehighest monthly figure since gross lending reached 23.6 billion in July 2008.

As lending in the regulated mortgage space picked up over the summer months, the pace of recovery hasimproved. This looks set to continue over the closing months of the year with the factors helping support thisrecovery continuing to be low inflation, strong wage growth, an improving labour market and competitivemortgage deals, said Bob Pannell, CML chief economist.

As a result lending this year is likely to exceed our forecast of 209 billion, though affordability pressures will limitbusiness volumes for first-time buyers and movers meaning that we think the market has only modest furtherupside potential over the short term, he added.

According to Peter Rollings, chief executive officer of Marsh & Parsons, lending levels are at an impressiveseven year high. Were yet to clear the pre-crisis July 2008 benchmark but over the summer the mortgagemarket has really taken it up a notch, and month on month improvements are getting more cheerful as weapproach the festive season, he said.

He pointed out that London has seen a significant boost in mortgage buyers and first time buyers since June, asdomestic activity intensifies in the housing market. Mortgage buyers accounted for 65% of London propertypurchases in the third quarter of 2015, a significant leap from 52% the previous quarter.

In addition to this 26% of all third quarter sales were to first time buyers. Overall competitive mortgage rates andlow inflation have paved a smoother road for buyers, and this has shifted the dynamic in the capital towardsBritish buyers, as key tax changes still act as a speed bump to some overseas buyers and investors, addedRollings.

John Eastgate, sales and marketing director of OneSavings Bank, pointed out that a scarcity of supply of property
remains an issue in a lending market that is still driven very much be refinancing activity. Wages are stillgrowing, while deflation is bolstering incomes in real terms, supporting borrowers finances. Negative inflation isalso kicking a rate rise into the long grass, which is enabling lenders to offer historically attractive rates, headded.

Demand is being driven by continued interest from prospective house buyers and a surge in the remortgagemarket, and this is being matched by the availability of finance, according to Henry Woodcock, principalmortgage consultant at IRESS.

Eyes are now turning towards end of year targets, fuelling interest rate competition between lenders, furtherstimulating borrower demand. With interest rate hikes now unlikely until the first half of 2016 at the earliest, thecost of servicing a mortgage is not going to soar any time soon, he said.

]Although there is certainly scope for policy change in the Autumn Statement to alter the state of play, themortgage market looks well set for the remainder of the year, he added.

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