Despite monthly gross mortgage lending falling 7% to £20.5 billion last month, it is still the highest September figure since before the financial crisis, new figures from the Council of Mortgage Lenders show. While gross mortgage lending has dropped 1.6 billion from August, the figure is still 2% higher than the £20.1 billion lent in […]
Despite monthly gross mortgage lending falling 7% to £20.5 billion last month, it is still the highest September figure since before the financial crisis, new figures from the Council of Mortgage Lenders show.
While gross mortgage lending has dropped 1.6 billion from August, the figure is still 2% higher than the £20.1 billion lent in September last year. This is the highest September figure since 2007 when gross lending reached £29.9 billion.
Gross mortgage lending for the third quarter of 2016 was estimated at £63.6 billion – 11% higher than the second quarter of this year and 4% higher than the third quarter of 2015.
CML senior economist, Mohammad Jamei, said: “Remortgage activity looks set to grow, helped by attractively priced mortgage deals encouraging borrowers to refinance. Prospects for house purchase activity continue to look slightly subdued, when compared to the same period a year ago.
“Despite this, housing market sentiment continued to improve in September, after recovering in August. As a result, we expect a modest rise in approvals, though at levels lower than seen earlier this year, as the lack of properties on the market for sale and affordability constraints continue to bear down on borrowers.”
Andrew McPhillips, chief Economist at Yorkshire Building Society, said: “Although mortgage lending has decreased compared to last month, it is still up on an annual and quarterly basis. This monthly decrease was most likely a result of a reduction in house purchase activity caused by the lack of available properties.
“This, along with affordability constraints as house prices have continued to climb upwards, has limited the number of people who are able to afford to buy a property. Conversely, remortgage activity is likely to show strong growth in the coming months as borrowers seek to make the most of record-low interest rates to reduce their monthly repayments.”
Henry Woodcock, principal mortgage consultant at IRESS, said: “The gross lending trend since the summer has been in an upward trajectory, so I’m surprised the market has stumbled.
“In spite of the fact that positive movements in the market all pointed to a continued recovery from the post-referendum and summer lull, borrower sentiment has not matched market expectations. However, I think this is just a blip.”
