According to industry research, mortgage lending is near a six year high
The level of mortgage lending has risen to a staggering £19.1bn in the month of July, reaching the highest monthly total seen for six years. The previous record was held in August 2008. According to information from the Council of Mortgage Lenders, figures showed that an increase of 7% from the month of June, also with a 15% increase on July 2013.
According to the advice of CML analysts, mortgage lending is now a robust avenue to take, as previously feared by a number of users in the industry. Regulations have brought changes to industry in order to enforce tougher means on the lending criteria, yet this doesn’t seem to have helped the process thus far. Despite this fact, the CML has stated that a 25% rise in the number of property transactions was actually up in the first half of 2014.
Caroline Offord, a CML analyst, has stated that pressures of affordability could have a direct effect on the property market.
“Economic conditions have strengthened, but while the Bank of England has signalled an improved economic outlook since May, headwinds remain,” she said.
It’s suggested that a rise in interest rates could soon be hitting the housing market, although this introduction of an increase is likely to be more measured and gradual compared to a sudden impact on the market.
Rule changes that are being introduced currently means that lenders must carry out more checks on their borrowers’ ability to repay the loans they take out. This process has been blamed for the slowing of loan amounts and transactions earlier in 2014.
The net amount of mortgage lending in the first half of the year reached a considerable £10.5bn, which Ms Offord has described as a “strong figure”. A comparison has been drawn between now and the past five years when the total barely went over £10bn for the whole year.
The Office for National Statistics said in August that house prices in the UK have risen by a sizeable 10.2% over the 12 months, hitting a new record high of £265,000. However, the London average was now almost sitting comfortably at £500,000.
What do you think of the UK mortgage market? Is this good news for the industry?