Property, mortgage and finance experts have welcomed the latest figures from the Council Mortgage Lenders (CML) today, showing gross lending in July 2015 was at its highest since the last big surge in July 2008.
Gross lending totalled £22 billion last month, which was 9 per cent higher than in June (£20.1bn) and 14 per cent higher than in July 2014 (£19.4bn). This was also the highest monthly amount recorded in seven years (£23.6bn in July 2008).
IMLA: Mortgage market “in rude health”
Commenting on the CML data, Peter Williams, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), said:
“There is no mistaking that the mortgage market appears to be in rude health this summer having posted the highest monthly lending total of the post-recession era. Lenders have clearly regained their appetite for business after repeatedly tightening loan criteria over the last 18 months.
“Affordability checks designed to promote responsible lending are set to bite harder as the market grows. This suggests there is little prospect of activity growing unchecked, especially as the Bank of England is likely to take pre-emptive action to counter any signs of instability. The eventual interest rate rise will also have a dampening effect, particularly as house prices continue to rise, and the next wave of regulation is just around the corner in the form of the EU Mortgage Credit Directive which puts another potential hurdle in the way of long term recovery.
“For now, consumers will be encouraged to see the gateways are still open to getting a mortgage under the new regime. But there are still important questions to answer about whether the current lending recovery is benefitting the many or the few.”
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Experian: Figures “really encouraging” for aspiring homeowners, retirees
James Jones, head of consumer affairs at Experian, said:
“The latest statistics from Council of Mortgage Lenders (CML) are really encouraging for those in the UK looking to either get onto the property ladder or move to a more suitable property. However, it would seem that those Brits opting to invest abroad may not benefit in the same way if tougher European lending rules come into play later this year.
“After a lifetime of working hard and responsibly saving, many retirees will be setting their sights on their dream home in Europe. But, unfortunately, for many it could remain just a dream, due to proposed lending changes set to be introduced next March as part of the European Credit Directive, which could make it much more difficult for expats to access foreign currency loans.
“In our recent research we found that three quarters (78%) of those over 65 do not understand the new European lending requirements. With added confusion to what is already quite a lengthy process, retirees need to be more prepared than ever when applying for a mortgage abroad.
“Personal financial planning is key for anyone taking out a mortgage, but especially those purchasing property abroad. Retired expats should take the time understand how the new rules will affect them and follow the same rigorous preparation as they would do for a UK mortgage.”
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Your Move and Reeds Rains: Mortgage lending “brakes free from shackles”
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “Lending has broken free from its shackles, and we are starting to see some real movement in the mortgage market after the stupor of the last few months. But it hasn’t just performed well against 2015 standards – it’s also escaped the legacy of the past eight years, and released borrowing back into pre-financial crisis levels.
“Activity is fighting fit on all fronts – this was also the strongest July for home sales since 2007. Buyers could be forgiven for treating this like a jailbreak at the moment. No one knows how long the gates to cheap mortgage finance are going to stay propped open, and everyone is listening out to encroaching footsteps of an interest rate rise.”
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LMS: Improved affordability good news for struggling families
Andy Knee, chief executive of outsourced property services provider LMS, comments:
“The mortgage market hit a seven year high in July – a massive boost to confidence in the sector – with homeowners being spurred by competition among lenders and a greater choice of products to purchase now and fix while these lower mortgage rates are still on offer.
“However, an improving UK economy is failing to filter down to many families who still feel the pinch month-to-month. But for those who can save enough for a deposit, the vast majority of lenders continue to offer record low rates. The improved affordability of mortgages – despite crucial supply issues UK-wide and concern about rising house prices – can help to reduce the pressures on struggling households.
“Greater speculation and rumours of an interest rate rise* occurring in the not-too-distant future will play a part in compelling borrowers to purchase now before mortgage costs rise. We anticipate steady levels of activity throughout the second half of 2015, both in terms of mortgaging and remortgaging. Whether or not a rate occurs early next year, now offers a prime time to take advantage of lender appetite and search for the best deals on offer. When interest rates do rise, however gradually this happens, households will see lenders raise mortgage rates and their monthly payments increase.”
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Phoebus Software: Base rate fears aside, borrowers will look to “make hay while the sun shines”
Richard Pike, Phoebus Software sales and marketing director, says:
“ Mortgage lending last month looks like it was the highest since July 2008, which shows an overall appetite to borrow and lend. Interest rates are still at an all time low and while this remains the case activity in the housing market is likely to be bouyant. Lenders are still offering great rates for borrowers in all areas of the market so people are moving, buying for the first time and remortgaging to take advantage of the deals on offer, before interest rates rise.
“Although predictions vary, will it be this year,next year, when? The economic forces seem to shift every week and making any kind of a prediction is probably unwise. The only thing that is certain at the moment is that while talk remains about interest rate rises people will want to make hay while the sun shines.”
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