Mortgage lending in February was down 9 per cent on both January and the corresponding month last year as a widely reported slowdown continued, taking gross issuance to a near two-year low.
Latest Council of Mortgage Lenders data reveal the £13.4bn lent, down from £14.8bn, was the lowest monthly estimate for gross mortgage lending since April 2013, when lending totalled £12.4bn.
Earlier this week, the CML also published figures which showed buy-to-let was the only area that saw mortgage lending grow in the last 12 months, with lending to first-time buyers and homemovers plummeting.
Bob Pannell, CML’s chief economist, explained that earlier soft approvals data meant that weaker February lending has not come as a surprise.
“Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising.
“We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through.”
Peter Rollings, chief executive of estate agents Marsh & Parsons, commented that a consequence of the MMR has been to lengthen the approval process, leading to a slower start to the year that he expects to lift as the market heats up later in the spring.
“Buyer finances emerge much healthier for going through a more rigorous obstacle course, and market confidence is in fine fettle.”
Richard Sexton, director of E.surv chartered surveyors, added that the purchase mortgage market is now working with newly introduced legislation to produce growth at a safe and sustainable pace.
“It’s the story of the tortoise and the hare – the reconfigured market has a wealth of checks and balances to ensure that growth occurs in a measured fashion rather than a dizzy burst. Growth is slower than a year ago, but it is more sustainable.”
peter.walker@ft.com
