The mortgage market has started to recover after a few months of slowdown, mostly stemming from the uncertainty around the General Election this year.
Experts from the industry have cheered the gross lending data published by the Council of Mortgage Lenders (CML) today.
The unadjusted figures showed a monthly surge of 29 per cent to £20.5 billion and a 15 per cent increase compared to a year ago for June 2015.
Gross lending in the second quarter of 2015, totalled £52.2 billion which was a 17 per cent rise on the previous quarter. In comparison to the same period of 2014, there was just a small increase of 1 per cent.
John Eastgate, sales and marketing director of OneSavings Bank, commented:
“Sentiment is improving, and the impact of General Election uncertainty is a thing of the past, with low rates acting as a key draw for borrowers. Although there have been indications that interest rate rises are closer, when these occur, they will be moderate and take some time to come through, and mortgage deals will remain attractive in the long term.
“Affordability remains a key issue, with house prices still increasing. Yes we have seen some recent intervention to stem demand, however it is supply that is the crux of the matter. While the Government has moved to speed the planning permission process, we are a long way from the level of housebuilding needed to match demand and contain house prices. The private rented sector’s role in the housing market will be ever more important, underpinning the long-term demand for buy to let mortgage finance.”
Stephen Wasserman, director of West One Loans, said:
“Mortgage lending has made a sleepy start to 2015, but June’s CML figures show a market awakening from its slumber and going about its business. The nightmare caused by the pre-election uncertainty is well and truly over and home loan borrowers are able to act more decisively now the political pitch is set.
“There is concern among some specialist finance providers that their business levels will suffer now that high street lenders have regained their appetite, but just because mortgage activity levels have picked up, it doesn’t mean that banks are displaying the same enthusiasm to lend to businesses and developers. They have been ably supported by short-term finance over the last few years and won’t abandon this useful source of funding in a hurry.”
Richard Pike, Phoebus Software sales and marketing director, said:
“As predicted activity in June was more brisk than in the previous few months, which seems to confirm that the much talked about uncertainty around the general election had a real impact. Going forward, with less uncertainty and a more stable political picture, I expect the market to continue to improve.
“Although the Governor of the Bank of England yesterday warned that interest rate rises are coming closer, most believe this will still not happen until 2016, and any rise is likely to be small which means we still have very competitive rates and products for the foreseeable. This should help the health of the whole of market, especially the remortgage sector which is still subdued”.
