The Council of Mortgage Lenders estimates that gross mortgage lending reached £13.4 billion in February.
This is 9% down on both January and on last February, in both of which months £14.8 billion was advanced. This is the lowest monthly estimate for gross mortgage lending since April 2013 when lending totalled £12.4 billion.
Commenting on market conditions, CML chief economist Bob Pannell says:
“Earlier soft approvals data meant that weaker February lending has not come as a surprise. Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising. We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through.”
Peter Rollings, CEO of Marsh & Parsons, comments: “February’s toned down lending levels are certainly not going to set the world alight, but the embers of the mortgage market are still glowing brightly. 2014 was an exceptional year – but also a formative one. The borrowing process was greatly transformed, and 2015 marks a return to more normal patterns of behaviour as these new affordability measures become part of the furniture.
“Lending is only just getting into its stride at the beginning of the year, and it’s also a much longer process from start to finish now, so we’ll see more approvals race through as the market heats up later in the spring. But buyer finances emerge much healthier for going through a more rigorous obstacle course, and market confidence is in fine fettle. First-time buyers had great cause for celebration yesterday, as another government measure offers thousands of aspiring homeowners a timesaver to accelerate saving for a deposit. With Help to Buy ISAs, whittled down stamp duty, generous mortgage rates, and plenty of supply on the market, all the elements are at work to up the ante in the housing market in the coming months.”
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