Gross UK mortgage lending dipped by 1.2 per cent to £16.2bn in September from £16.4bn in August, according to the latest figures from the Council of Mortgage Lenders.
However, analysis from the CML showed that, year-on-year, mortgage lending in September was 41 per cent higher than in September last year, which stood at £11.5bn total. The London market continues to lead the way compared to the rest of the UK, the figures suggested.
However, for those at the lower end of the housing scale, lending appears to have levelled out from the huge monthly increases seen recently, said David Brown, commercial director of LSL Property Services.
He said: “The climbs are still short of pre-crisis levels as household budgets continue to be squeezed by rising living costs, rock-bottom saving rates, and slow income growth – all obstacles on the path to homeownership.”
Andrew Montlake, director for London-based Coreco, said despite the hype around the government’s Help to Buy scheme, it would not be until January that the market would see any “real effect” as more lenders get involved.
He said: “We are seeing clients re-evaluating their options and considering using the scheme even though they do not need to. However, it should be noted that anyone hoping for a return of cheap and easy loans is likely to be disappointed.
“Lenders still need to price for risk – guarantee or not – so rates are likely to stay at a similar level, at least until more competitors enter the market next year.”
Adviser View:
Tom Wilcox-Jones, financial adviser for London-based Blackstone Moregate, said: “House purchase lending is at its highest for nearly six years, and high loan-to-value lending is a lot higher than this time last year, so clearly the market is recovering, and we expect more of the same as the Help to Buy scheme really kicks in.
“The problem, though, especially at the lower end of the market, is that this scheme may crowd out a lot of people from the starter end of the housing market, pushing up rents even further.”
