The Council of Mortgage Lenders has released the latest information on mortgage lending. It confirms the picture seen in the UK over the past few months, indicating that the housing market as a whole is becoming more settled.
£16.9 billion gross lending figure achieved in November
This is actually the same figure we saw in November 2013. It also represents a 9% drop over the figure seen in October this year, when the total amount was £18.6 billion.
Is this a surprise drop?
Not really – the market always sees a drop in the run-up to the Christmas period. People don’t generally want to move at this time of the year, or to go through the process of applying for a mortgage and looking around for a property. Thus a seasonal drop towards the end of any year is quite common.
We are also several months into the new Mortgage Market Review rules, so we can gain a better understanding of how the new rules have affected the markets. It seems as though lenders are now getting to grips with the rules and are no longer working with a backlog of requests. This has given experts a chance to review the situation regarding mortgage approvals and to consider the potential path they may take in the future.
House prices have fallen too
Some house prices have also been seen to fall in recent times, but not in a major way. Instead it is seen as more of a levelling of the market. There are no indications of a major fall and huge rises don’t seem to be on the cards either. While the stamp duty reforms are likely to make an impact on the housing market it is believed this will only be seen in the short to medium term rather than having a prolonged and pronounced effect.
A long way from January 2014
If you remember, the first month in the New Year saw a 40% leap in mortgage lending compared to January 2013. However this could have been created by a number of factors – firstly the upcoming MMR situation and secondly by people wanting to move early in the New Year.
While we have seen no rises since then that have been anywhere near that level, this is actually a promising outcome. Many experts believe mortgage lending will now be far more settled, with none of the sharp rises or falls we have seen occasionally in recent months. One expert noted it was more “sustainable” than the alternative.
However while these figures are all encouraging, the mortgage rules now in place have created problems for some potential homebuyers. This means targeting older borrowers who would be retired before their mortgage was paid off among other groups.
Clearly any worries of a housing boom seem to have abated. Indeed there are no real concerns such a boom could present itself during 2015 either, with a healthier and steadier picture more likely instead.