Taylor Scott International News
Gross mortgage lending reached £17.6 billion in February, some 5% lower than January but 30% higher than February last year, according to the latest estimates from the Council of Mortgage Lenders. It is, however, the highest lending total for a February since 2008 when gross lending reached £24.1 billion. ‘Lending continues the year on a positive note, with our monthly estimate showing an increase of 30% in February compared to a year ago. This growth rate is in line with what we saw in the closing months of 2015,’ said CML economist Mohammad Jamei. He explained that 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 the CML thinks it is 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 01 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,’ he added. Andy Knee, chief executive of LMS, believes that apart from a slight dip in activity expected following the April tax changes, all factors are working in the mortgage market’s favour. ‘Despite a delay in the base rate rise, the remortgage market in particular is likely to continue unabated, with home owners sitting on record housing equity and capitalising on the hugely competitive rates currently available,’ he pointed out. According to Peter Rollings, chief executive officer of Marsh & Parsons, once the April deadline passes it will quickly revert to business as usual, and a subsidence in buy to let borrowing will likely water down the growth in the mortgage market. ‘The Chancellor is certainly laying the long-term foundations for future mortgage lending levels, with the Lifetime ISA announcement just the latest guise to help first time buyers save up for a deposit and get onto the property ladder,’ he said. ‘But these savers are a long way down the pipeline, and in the immediate term, borrowing is more likely to feel the brunt of measures affecting the buy to let market. Property investors were completely overlooked in the Budget, and the Chancellor’s move to exclude landlords from the tax break on capital gains seems at odds with the need for greater supply of property on the market. Any measure that discourages and disincentives selling homes is not helpful in the current climate, and for buyers trying to keep track of house prices,’ he added. Taylor Scott International
Taylor Scott International, Taylor Scott
