UK Sees Highest Gross Home Lending Rate in Eight Years

Last month the UK saw its highest rate of gross home lending since 2008 as it reached £18.2 billion.

That was a 4% rise on April’s figure of £17.6 billion and 14% more than May 2015, according to the latest figures from the Council of Mortgage Lenders, a group which represents a significant majority of UK home lenders.

The figure is at its highest for the month of May in eight years, when gross lending reached a figure of £23.7 billion.

A senior economist at CML, Mohammad Jamei, commented that lending continued to be rather dampened in May as anticipated, which reflects the first quarter rush to beat the changes to stamp duty on second properties.

Mr Jamei believes that in the future there is likely to be a great deal of uncertainty in the sector following the UK’s decision to leave the European Union.

He is expecting this to reduce activity below expected levels and affect sentiment, as both sellers and buyers take a ‘wait and see’ approach until the dust has settled.

The economic expert added that the market fundamentals which underpin house prices still seem sound, and they are not anticipating any significant falls in house prices, especially given the current imbalance of supply and demand.

Chief executive officer of the National Association of Commercial Finance Brokers (NACFB), Adam Tyler, believes that the ‘wait and see’ attitude, along with greater caution, is likely to be seen in both seller and buyers because of the Brexit vote.

Mr Tyler commented that the view of the NACFB is the same as that of the CML in terms of market fundamentals remaining in a sound state, with a material price decline being prevented by the sharp supply and demand imbalance.

He also said that volatility in economic and political terms could work in favour of the buy to let market as investors still view bricks and mortar as safe investments.


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