Liquid error: wrong number of arguments (2 for 1) Mortgage lending dips in February as rush to remortgage cools | Marsh & Parsons Sales and Lettings Estate Agents London

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Mortgage lending dips in February as rush to remortgage cools

Thu 17 Mar 2016

The Council of Mortgage Lenders revealed that lending reached 17.6billion in February 5 per cent lower than
Januarys 18.5billion but up 29 per cent on the 13.6billion recorded a year ago.According to economists, the
likelihood of a imminent interest rate rise has faded, meaning property investors and owners have more time and
less pressure to find better deals.Contrasting figures: Lending reached 17.6billion in February 5 per cent lower
than Januarys 18.5billion but almost 30% up on the February 2015 figureToday the Bank of Englands
Monetary Policy Committee voted unanimously to keep rates unchanged at 0.5 per cent for March, marking
seven years of record low interest rates.The BOE is now expected to leave interest rates alone this year as
Governor Mark Carney and his colleagues wait for further signs that the UK economy has fully stabilised.Howard
Archer, chief UK and European economist at IHS Global Insight, said: With expectations of an interest rate hike
any time soon recently fading markedly, there may be an easing back in the number of people feeling a need to
re-mortgage in order to lock in low interest rates before they start to rise.Markits Household Finance Index shows
that the number of respondents expecting an interest rate hike within a year edged back further to 45 per cent in
March (the lowest since November 2013) from 46 per cent in February and 71 per cent in January.The number
expecting an interest rate hike within 6 months dropped to 19 per cent in March from 22 per cent in February and
40 per cent in January.Despite the dip from January to February, gross lending was up substantially
year-on-year, with the CML reporting the highest lending total for a February since 2008 when gross lending
reached 24.1billion.More detailed mortgage lending figures from the CML will follow the gross lending data,
showing net lending and a breakdown of who is borrowing, from first-time buyers to buy-to-let landlords.Previous
figures from January showed a 38.1 per cent annual leap in the number of loans remortgaged by buy-to-let
investors. There was also a 19.1 per cent rise in remortgaging by homeowners during the month.But with the
interest rate outlook changing markedly, this rush may be beginning to subsided.Gross mortgage lending by
month2015Feb 13.577bnMarch 16.191bnApril 15.953bnMay 16.015bnJune 20.067bnJuly 21.605bnAugust
19.545bnSeptember 20.067bnOctober 21.830bnNovember 20.452bnDecember 19.718bn2016January
18.470bnFebruary 17.600bnThe CML, whose bank and building societies members provide around 95 per cent
of all residential mortgage lending in the UK, also warned it was unlikely that there will be any significant
acceleration in lending in the coming months.CML economist, Mohammad Jamei, said: We think it unlikely that
there will be any significant acceleration in lending.While there may be a slight current boost to lending as some
transactions seek to complete before the 1 April tax changes in the buy-to-let-sector, this is likely to be followed
by a slight fall in activity.Affordability pressures continue to weigh on activity, as does the low number of
properties coming on the market, though this has been improving very recently.Lending figures have been
bolstered as buy-to-let investors rush to beat a looming stamp duty hike which takes place this April.From April 1,
people buying second homes, such as landlords investing in buy-to-let properties, will face a three per cent
surcharge on stamp duty.Peter Rollings, chief executive of estate agent Marsh and Parsons, continued: Were on
the final stretch now before the April 1 stamp duty changes come into force, and this has front-loaded buy-to-let
lending into these early months of the year.But once the deadline passes it will quickly revert to business as
usual, and a subsidence in buy-to-let borrowing will likely water down the growth in the mortgage market.Archer
added: Housing market activity is seemingly getting some boost at the moment from Increased activity from
buy-to-let and second home purchases ahead of Aprils rise in Stamp Duty.This could exert limited upward
pressure on house prices in the near term.Back to normal soon: Peter Rollings, chief executive of estate agent
Marsh and Parsons said we are on the final stretch before the irritating April 1 stamp duty changes come into
forceProperty website Rightmove recently reported that house sellers asking prices across England and Wales
jumped to a record high in February. The typical price tag on a property coming to market is now 299,287.The
property listings website has also seen evidence that the supply of properties coming on the market is edging up
in some areas. A lack of supply has been blamed for holding back sales.Mark Harris, chief executive of mortgage
broker SPF Private Clients, said: Higher wages, a fall in unemployment, cheap mortgage deals and the likelihood
that interest rates wont rise anytime soon, are boosting confidence and promoting growth.We expect this
situation to continue in coming months. There are potential hiccups on the horizon which may foster some
uncertainty, such as the EU referendum, but for many people life will go on and it will be business as usual.The
challenger banks are keen to lend, while more established lenders also wish to bring in more business, which will
be reflected in cheap rates and some tweaking of criteria. On the buy-to-let side, lenders will need to adapt to
lending to limited companies as it looks as though an increasing number of investors will go down this route.

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