Gross mortgage lending fell slightly in August from July but continued to show signs of recovery.
According to the Council of Mortgage Lenders’ latest figures, an estimated £16.6 billion gross was borrowed in August, almost on a par with the £16.7 billion figure seen in July and 28 per cent higher than August of 2012.
Commenting on the findings, CML chief economist Bob Pannell said: “We are beginning to experience a healthy and broad-based recovery in mortgage lending activity. We attribute much of this turnaround to the improvement in funding markets generally, and also to the Funding for Lending Scheme. The Bank of England’s approvals data suggests that the positive tone for house purchase and remortgage lending will continue.
“One tell-tale sign of a recovering housing market is the re-emergence of concerns about a housing boom… But, as we have argued elsewhere, the housing market recovery to date appears fairly unexceptional in nature, at least compared with that of the early-mid 1990s”.
Sophie Hall, Head of Intermediary at Avelo, commented on the figures: “The mortgage market has been roaring back into life, and these monthly figures represent lending pausing for breath rather than a premature end to the recent recovery. In reality, first-time buyers are still flocking to the market in their droves. A combination of rock-bottom rates caused by Funding for Lending, and the added assistance of Help to Buy will see demand go from strength to strength in the latter part of 2013.”
“However, as mortgage brokers benefit from a booming mortgage market, they must not overlook mortgage protection. The proportion of mortgage sales with mortgage protection is dropping. Given how vital protection is for customers’ long term security, it is crucial brokers do not take their eye off the ball and revert to their pre-credit crunch approach.”
