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Best April for gross mortgage lending since 2008
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The most recent report by The Council of Mortgage Lenders has revealed that gross mortgage lending hit £18.5bn in April.
Despite this being 29% down on the £26.2bn recorded in March, the figure is 16% greater than £16bn lent in April 2015. This makes it the largest lending total for April since 2008, when £25.3bn was lent.
Back-seat
Mohameed Jamel, economist at the Council of Mortgage Lenders, ‘as we move past the stamp duty change that came into effect at the start of April, we expect to see a quieter second quarter, as some transactions that were due to take place were brought forward to the first quarter of this year. This is likely to mean that over the next few months buy-to-let takes a back seat as lending is driven by first-time buyers, movers and remortgage customers.’[1]
‘The underlying picture still shows signs of growth, as the market remains underpinned by strong fundamentals such as increasing wages and rising employment. But it is possible that the uncertainty around the upcoming EU referendum in June will weigh on activity in the upcoming months,’ he added.[1]
Best April for gross mortgage lending since 2008
No surprise
Henry Woodcock, principal mortgage consultant at IRESS, said, even with the availability of high numbers of low interest rate mortgage deals, it’s no huge surprise that borrowing in April was so much lower than in March given the false peak which resulted from a rush to beat the Chancellor’s 3% tax hike on BTL. Will we see a rise in lending in May? That will depend on a number of factors.’[1]
‘Lenders may increase the number of long-term deals of up to 40 years to tempt borrowers struggling to afford shorter terms, but on the flip side, as the Bank of England interest rate remains static, lenders may increase interest rate margins. The lowest rate tracker deals have already risen by 0.24% in the last six months. The unknown effect of the EU vote in June may further depress lending in May as borrowers wait and see both the result and the impact on lenders and house prices,’ Woodcock concluded.[1]
[1] http://www.propertyreporter.co.uk/hero/gross-mortgage-lending-sees-best-april-since-2008.html
