Peter Williams is executive director of the Intermediary Mortgage Lenders Association
The mortgage market is showing ever stronger growth, with the total volume and value of approvals consistently rising for the last three months.
January saw 4% more mortgages approved than December, but while activity is increasing, the average amount people are borrowing actually fell by 3%.
It suggests the size of mortgage loans remains stable in spite of rising house prices, with households and lenders exercising caution given that the only interest rate changes likely to arise will be upwards.
Many aspiring buyers are still in vital need of support through affordable loans. The growth of approvals is particularly good news for owner-occupiers, especially with the house buying market growing noticeably faster than remortgages [volumes rose by 13% and 3% respectively between October and January].
With £18.6bn of lending recorded in the first month of 2014, the market is on course to continue its recovery as IMLA has forecast.
Regulatory change in April means we may see lending activity impacted, but we can expect a stronger and more rounded market to emerge from the shadows this year, especially with low interest rates preserved for now and Help to Buy 2 getting into gear.
However, we are still a long way from a full recovery and there is plenty of capacity to support a more expansive and sustainable mortgage market without the continued need for extraordinary support. To get us there, important decisions need to be made and action taken to address the future balance of lending, house building and regulation.
With cash playing a stronger role in the market last year than at any other time during or since the recession, whether for full purchases or as a deposit, there is much to consider.
