March UK home lending dip masks best Q1 since 2007

Photo: Images_of_Money

The latest Mortgage Monitor from the UK’s largest chartered surveyor shows that an average 71,710 house purchase loans were granted across the first three months of 2016, the highest opening quarter total in nine years.

The first few months of unusually high activity have been powered by a rush from buy-to-let landlords racing to beat April’s stamp duty changes. However, March saw a monthly dip in lending, as some landlords were too late to beat the stamp duty surcharges coming into effect on the 1st April. The month saw 67,173 overall house purchase approvals (seasonally adjusted) – 9.1 per cent lower than the 73,871 seen in February. Despite this, March marked a return to normal activity with all borrowers, including first-time buyers, benefiting from a healthy range of mortgage products.

To date a total of 210,468 house purchase approvals have been granted this year, 13.5 per cent higher than 185,356 in the first three months of 2015. House purchase lending has also risen annually – up 8.2 per cent from 62,095 loans granted in March 2015.

Richard Sexton, director of e.surv chartered surveyors, comments: “After a storm of activity from buy-to-let owners trying to beat the stamp duty deadline there’s been some more recent uncertainty about what the lending market will look like post-regulation. March has seen a calmer lending environment while remaining buoyant. Yes, house purchase loan numbers are slightly down – but overall borrowing levels are highly encouraging.

“March may not be the most impressive month numerically but it has set a sustainable standard for the rest of the year.”

First-time buyers are “finding their feet again”, he adds, with lenders keen to invest in them, offering a variety of rates and options. Indeed, first-time buyers don’t appear to be overly cautious, as the proportion of small-deposit borrowing rises.

“But it’s not all smooth sailing,” he warns. “Many first-timers will have been eagerly awaiting the March Budget, hoping the Chancellor would usher in real changes to improve their homeownership prospects. What they got was a disappointment. Saving for a deposit is a real challenge for many, no matter what region of the UK you’re aiming to buy in, and house prices are hurtling ahead. Earlier initiatives like the Help to Buy ISA and Help to Buy Scheme have helped certain people, but have so far struggled to either have a widespread impact or solve the most serious problems. This new Lifetime ISA won’t significantly shorten the years aspiring buyers spend saving and will most likely struggle to make a real difference.”

UK mortgage lending jumps 30pc

17th March 2016

Gross mortgage lending in the UK has jumped 30 per cent, estimates the Council of Mortgage Lenders. This is 5 per cent lower than January (£18.5 billion) but almost a third higher than February last year (£13.6 billion) and the highest lending total for a February since 2008 when gross lending reached £24.1 billion.

“This growth rate is in line with what we saw in the closing months of 2015,” comments CML economist Mohammad Jamei. “The recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals.

“But 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,” Jamei adds.

UK lending jumps 23 per cent

22nd January 2016

UK lending rose to a historic high at the end of 2015, according to the Council of Mortgage Lenders.

The CML data estimates that gross mortgage lending reached £19.9 billion in December 2015, 3 per cent down from November 2015 (£20.5 billion), but 23 per cent higher than December 2014 (£16.2 billion). This brings the estimated total for the year to £220.3 billion, 8 per cent up on the previous year and the highest annual total since 2008.

Gross mortgage lending for the fourth quarter of 2015 was therefore an estimated £62.3 billion, 23 per cent higher than the fourth quarter of 2014.

The figures are echoed by the latest e.surv mortgage monitor, which found that house purchase lending dropped towards the end of 2015, due to a lack of supply, with seasonally-adjusted approvals decreasing 3.1 per cent month-on-month. Nonetheless, the second half of the year saw a strong monthly average of 69,572 approvals, compared to 64,047 across the first six months of 2015, reflecting the broad improvement in conditions and sentiment.

Richard Sexton, director of e.surv chartered surveyors, comments: “House purchase lending has been rejuvenated over the past year and with the second half of 2015 looking stronger than the first in lending terms, the trend looks positive. Small-deposit lending has been transformed by a renewed enthusiasm to help first-time buyers cross the threshold of homeownership, as evidenced by the number of higher LTV products available.”

Both the CML and e.surv, though, highlight some concerns going into 2016, as lenders remain cautious over the impact of looming buy-to-let changes on the market and the chartered surveyor notes the dampening effect higher stamp duty charges are already having in the prime property sector, coupled with a “limited choice of affordable homes”, and the eventual introduction of the Mortgage Credit Directive.