At first glance the news regarding the rise in mortgage lending in the first quarter of 2014 would seem to support the theory that the housing market is looking better by the day. However is this merely a short term result that is about to be stopped in its tracks?
Up by more than a third on last year
According to the latest statistics released by the CML (Council of Mortgage Lenders), there has been a massive rise in mortgage lending in the first three months of 2014. The percentage increase was 37% when compared to the same period in 2013.
The figure for March alone signalled an increase of 4% on the previous month. This has been seen as encouraging for the housing market as a whole, although the overall picture is still uncertain in many ways.
Lending focused on familiar ground
To begin with the pattern of lending is still firmly focused in London and the South East. Properties here are more expensive than in other parts of the country but there are still more properties being bought and sold here than elsewhere.
It is wise to remember though that the last three months have still seen a lower level of mortgage lending when compared to the final three months of 2013. The figures show the dip has amounted to 10% less than was seen as 2013 came to a close. This is largely due to the lull that typically takes place in the early months of the year with regard to mortgages and lending.
Will the new lending rules change the outlook?
Despite the healthy figures for the last three months some are speculating whether the picture could be very different in the near future. We have previously reported on the tougher rules coming into play on 26th April. These rules could well lead to a drop off in lending as both lenders and mortgage applicants get used to the new system. Many assume there will be a higher rate of rejection, not to mention a longer procedure involved in getting a mortgage in the first place.
Some other commentators have stated there will be little change once the rules come into force. The housing market is still a long way from where it was before the financial crisis hit a few years back and the new rules are likely to stall it in its current position, at least for a while. Of course no one knows exactly what will happen. It could be that those who were considering moving home have done so in the last three months to avoid the additional hassles that will be prevalent from the 26th April onwards. Only time will tell if this has been the case.