The future of home lending is beginning to look more encouraging according to experts in the field. This is despite a slight dip of 1% in lending across April this year. This was also down by 4% compared to the same month in 2014.
Despite this, an economist with the Council of Mortgage Lenders (CML), Mohammad Jamei, suspects the existence of stronger figures for March points to a ‘modest lending recovery’ overall.
Why is this the case when figures are down for April?
In order to understand the prediction we must look at the bigger picture. For example earnings are now growing at a rate that is greater than inflation. This means peoples’ finances are generally getting better, with a little more cash available than has sometimes been the case in the recent past.
There are also far more encouraging mortgage rates to be considered. Indeed, some of those currently available are the lowest we have ever seen. This points to more affordable mortgage rates for many of those who are looking for a new mortgage.
No news is good news
The chief executive of the haart estate agent, Paul Smith, also points out that casual growth in house prices is also a good thing. Instead of seeing many dramatic headlines announcing a sharp rise in house prices, we are seeing more subdued rises – but rises just the same. As Mr Smith pointed out, this is actually better and more encouraging for confidence among both sellers and buyers.
Will the outcome of the General Election mean better figures next month?
Now the General Election has been decided, it could mean a change in the figures for May. It was believed that many people were waiting to see which party would come into power before committing to a house purchase. Now the outcome is known this may mean people who were hesitant about buying will do so in the near future.
It is clear though that the general consensus is steered towards gradual improvements in the housing market rather than sharp rises or falls. A number of changes in circumstances as mentioned above are leading to more positivity in the markets. With earnings rising faster than inflation and the sheer number of good deals available for mortgages today, would-be homeowners are in a better position than they have been for some time.
While would-be borrowers still have to meet the requirements laid down by the Mortgage Market Review, it seems as though a combination of elements has resulted in a more encouraging picture being seen for the summer ahead. Indeed many experts are expecting a gradual increase in mortgage lending to come into force over the next few months. It remains to be seen whether this will be the case throughout the rest of the year, but it is certainly an encouraging sign at present. 2015 may yet be remembered as a year when the housing market gradually moved in the right direction for many.