Gross mortgage lending holds steady

According to the latest figures released by the Council of Mortgage Lenders gross mortgage lending held steady in August at an estimated £16.6 billion.

Lending was only slightly higher in July at £16.7 billion and was 28% higher than August last year.

CML chief economist Bob Pannell said: "We are beginning to experience a healthy and broad-based recovery in mortgage lending activity.

“We attribute much of this turnaround to the improvement in funding markets generally, and also to the Funding for Lending Scheme.

“The Bank of England’s approvals data suggests that the positive tone for house purchase and remortgage lending will continue.”

David Brown, commercial director of LSL Property Services, mentioned that the focus on lending to first time buyers had helped invigorate the market. He said: “Much has been made of a housing and mortgage ‘boom’.

“The market is right to be concerned with not repeating the mistakes of the 2000s, but talk of a ‘bubble’ or a ‘boom’ is alarmist and sensationalist.

“Mortgage lending is at sensible levels, and high LTV lending is still less than half the level seen in years before the financial crisis.

“The increases in house prices and mortgage lending over the last six months are a natural market correction and a normal recovery from an economic downturn.”

Sophie Hall, Head of Intermediary at Avelo, pointed out the need for keeping an eye on mortgage protection. She said: “A combination of rock-bottom rates caused by Funding for Lending, and the added assistance of Help to Buy will see demand go from strength to strength in the latter part of 2013.

“However, as mortgage brokers benefit from a booming mortgage market, they must not overlook mortgage protection.

“The proportion of mortgage sales with mortgage protection is dropping. Given how vital protection is for customers’ long term security, it is crucial brokers do not take their eye off the ball and revert to their pre-credit crunch approach.”

Today's Conveyancer