The CML estimates that gross mortgage lending reached £20bn in August. This is 8% lower than July’s lending total of £21.7bn, but 12% higher than August last year (£17.8bn).
Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.
“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007. We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”
Henry Woodcock, principal mortgage consultant at IRESS, believes the fact that August’s sales were lower than July’s shouldn’t be misinterpreted.
“Mortgage lending finally came off the boil in August as the seasonal summer lull limited the overall activity undertaken in the month,” he said. “However, the slowdown shouldn’t be misinterpreted as the market grinding to a halt.
“Mortgage rates remain at record lows, buoying demand, while we are also seeing a new flurry of low deposit mortgage products hitting the market.
“All of this bodes well for total lending levels for the remainder of the year, in spite of concerns of an interest rate rise.
“In the longer term, affordability will remain the key constraint for the market, preventing more rapid improvement. While wage growth is still showing promising growth, it is being outstripped by rising house prices, and we won’t see this growth subside until the supply and demand balance is addressed.”
Mark Harris, chief executive of SPF Private Clients, believes now is a good time for your clients to consider remortgaging.
“Despite fears that we have seen the best of the fixed rates, lenders have good capacity to lend, with five-year deals still available at less than 2.5%.
“With talk of a rate rise on the horizon, and some excellent deals available, it is a good time to remortgage and the number of borrowers doing so is rising accordingly.
“The mortgage market remains over supplied with lenders having more money to lend than there are people looking for mortgages. This means criteria will have to loosen and rates will have to remain low to ensure lenders hit their volume targets.
“For many borrowers the main issue is not so much finding a cheap mortgage rate but being able to prove affordability to satisfy the lender and meet tighter criteria post Mortgage Market Review.”
