18 September 2014 | By Paul Thomas
Gross lending shot up 13 per cent year-on-year in August, according to figures published today by the Council of Mortgage Lenders.
Lenders advanced £18.6bn in August, up from £16.4bn in the same month last year.
On a monthly basis, lending was down 5 per cent from the £19.7bn lent in July.
While lending was up year-on-year, CML chief economist Bob Pannell is predicting a slowdown in the coming months.
He says: “The narrative of recovering house purchase and buy-to-let activity continued through August. However, it is important to be aware that this picture is being flattered by strong seasonal factors through the summer period.
“A gentle slowing of lending activity may now be in prospect, as a result of the continuing impact of tighter lending rules and a softening of the London market.”
Iress principle mortgage consultant Henry Woodcock agrees: “The mortgage market is coming off the boil a little after a red hot 2014 so far. While the traditional summer lull is expected, the impact of more stringent and onerous processes as a result of the MMR is still hampering the approvals process.
“But other dampening factors have come into play: affordability remains a key concern, and rising house prices – with those in London hitting a record high – are limiting the prospects of many would-be buyers.”
However, SPF Private Clients chief executive Mark Harris believes lenders will ramp up lending in order to meet their year-end targets.
He says: “As we move into autumn, lenders have one eye on their year-end figures and are ramping up their lending volumes to meet them. Subsequently, there are some excellent fixed-rates available over two and five years so borrowers who are concerned about rate rises should act now to obtain some security.”