There will be no “depression” in the mortgage market, despite the brakes being applied over recent months, Henry Woodcock, principal mortgage consultant for Iress, has predicted.
Speaking as the Council for Mortgage Lenders unveiled the latest gross lending figures for the UK market, Mr Woodcock said: “Recent signs on the ground have pointed towards the brakes being applied to housing market activity, and this has been reflected in today’s lending figures.
“Climbing house prices have proved a cause for concern for prospective new buyers and lenders alike, and the effect of this has been exacerbated by the ongoing operational problems caused by the mortgage market review in April, not to mention fears of a restriction on loan-to-income multiples.”
However, he said that although “caution and prudence may be watchwords” in the current market, the UK was “not likely to see a prolonged depression”, adding: “As lenders look to hit targets for the end of the year, mortgage rates are being pushed down.
“With interest rate hikes now unlikely to rise as soon as was first thought, the cost of servicing a mortgage is not going to soar any time soon. This in turn will continue to stimulate demand from buyers.”
According to the latest CML figures, gross mortgage lending reached £17.8bn in September, slightly lower than £18bn in August, although still higher than September 2013, when the figure stood at £16.2bn.
Gross mortgage lending for the third quarter of this year was therefore an estimated £55.5bn, representing a 13 per cent increase on the third quarter of 2013, when it stood at £49.2bn.
| Monthly Lending Data: CML 2014 | (£bn) |
| January | 16,139 |
| February | 14,774 |
| March | 15,437 |
| April | 16,626 |
| May | 16,894 |
| June | 17,885 |
| July | 19,652 |
| August | 18,061 |
| September (estimate) | 17,800 |
| Source: CML |
Adviser view
Brian Murphy, head of lending for London-based Mortgage Advice Bureau, said: “While overall mortgage lending remains up on the previous quarter, the rate of growth has eased into a more sedate pace as tighter lending conditions and uncertainty about interest rates temper demand.
“Other areas of the housing market – such as house price growth – also appear to be coming off the boil, making conditions less frantic for consumers.”
