Latest CML lending figures – who should conveyancers be targeting?
The latest Council of Mortgage Lenders (CML) data from November 2014 has shown mortgage lending is down across the board, compared to the same period last year. The only annual increase was within the Buy to Let market – is this the sign of things to come within conveyancing and will transactions be focussed within the rental sector in 2015?
The hardest hit market, according to the CML figures, were the first time buyers, seeing an 11% monthly decline compared to October, with a total of 25,900 loans for the month. This figure however is only a 3% decrease from the previous year.
Buy to Let borrowing showed a strong yearly boost, with the volume increasing by 9% when compared to November 2013, and the overall value up by 14%. Does this demonstrate the great stability of this market of recent?
Taking these latest figures into account – who should conveyancers be targeting for business? Do the first time buyers need more support or should we embrace the mentality of our European neighbours and be heralded as a nation of renters?
Andy Knee, Chief Executive of LMS, comments on the latest figures:
“The industry-wide month-on-month decline in lending to first-time buyers, home movers and remortgagers is an unambiguous sign of a seasonal cooling of the market towards the end of the year. While the market pauses for breath, however, it is important not to ignore the 3% fall in year-on-year lending to first-time buyers, which is further evidence of the impact of stricter lending criteria and tougher regulations on those who continue to be locked out of the market. There are expectations that with almost nine months’ worth of understanding of the MMR, the market will work more benevolently in 2015, enabling lenders to lend to those currently unable to acquire finance for their homes.
“Remortgaging follows similar patterns, and while it’s easy to attribute the month-on-month fall to seasonality, remortgaging is down by 16% from November of last year, which may be attributed to a number of factors: general market perceptions that acquiring a mortgage has become tougher after April and expectations that interest rates are set to remain low until a more robust economic recovery is established. Looking at the lender perspective, with MMR now bedded in, they are keen to increase business levels in 2015 and with the purchase market falling back, many lenders are providing an added emphasis to their remortgage offering.
“So, now is an ideal time for brokers to contact their clients and make sure that they have the best possible deal as this could be a once in a lifetime opportunity to lock into the lowest ever mortgage rates.”
Richard Sexton, Director of e.surv chartered surveyors, comments:
“Inflation has fallen to a record low, which has had a domino effect on the mortgage market. Even the more bullish members of the MPC have backpedalled to vote against a base rate rise. Low rates prevail. As a result the fixed rate mortgage deals available for buyers have fallen to new lows. And with stamp duty charges dramatically reduced for many, the housing market is becoming more accessible.
“Despite this winning combination, demand for lending is still slower than at the start of last year. But the market is now starting to stabilise. House purchase approvals rose for the first time in six months in December. Wages are starting to show real growth, meaning many borrowers are finding it slightly easier to save for a deposit, and Help to Buy continues to provide another way onto the ladder for those still struggling to put together that initial lump sum.”