Market boost as mortgage lending rises - with further to go

Gross mortgage lending reached a remarkable £246 billion in 2016 - that’s 12 per cent higher than the previous year and the highest annual gross lending figure since the economic downturn began in 2008. 

The Council of Mortgage Lenders says that on a monthly basis, gross mortgage lending reached £20.4 billion in December - down on the previous month, largely for seasonal reasons, but some four per cent higher than the December 2015 figure. 

“Approvals for house purchase have recovered strongly of late, and this should feed through to lending figures in the early months of 2017. The current availability of mortgage credit is benign, and the real issue continues to be a dearth of properties on the market, which adds to the challenges facing would-be buyers” according to CML senior economist Mohammad Jamei.

However, “uncertainty associated with political factors and prospective changes to the tax treatment of landlords will weigh on prospects for the year ahead” he warns.

“These figures are positive news and reflect other surveys which have shown that the property market showed a lot more resilience than some gave it credit for last year, particularly after the referendum” according to London estate agent and former RICS residential faculty chairman Jeremy Leaf.

“However, what sets the tone for the new year is approvals in the pipeline and market sentiment, both of which have been fairly neutral so far. What we are seeing on the ground are fewer but more serious buyers keen to take advantage of the opportunity afforded by a market with more balance between supply and demand” he adds.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says this year has started strongly in terms of availability and cost. 

“Swap rates have settled down since the beginning of January and several lenders have announced competitive deals on the back of these. HSBC, Barclays and Aldermore have all launched cheaper rates this week and an appetite to do business among lenders shows no signs of abating. This is particularly good news for those borrowers who require a straightforward ‘vanilla' mortgage” he says.