Gross mortgage lending increases

Gross mortgage lending increases

The latest figures from the Council of Mortgage Lenders estimate that total gross mortgage lending increased to £11.6 billion in March.

This is an increase of 9% from February but 8% lower than £12.6 billion in March 2012; however the first-time buyer stamp duty holiday expiration makes meaningful comparison difficult.

Gross lending for the first quarter of 2013 was an estimated £33.8 billion. This represents a 9% drop from the last three months of 2012 but matches the gross mortgage lending total for the first quarter of 2012.

David Brown, commercial director of LSL Property Services, said: “This time last year saw the end of the stamp duty holiday and a last minute mortgage scrum from first time buyers which has distorted the year on year figures.

“But even with the stamp duty bubble last March, lending this quarter has matched that of last year, highlighting the renewed buoyancy which the Funding for Lending Scheme has given the market."

CML said the “Help to Buy” mortgage guarantee scheme was likely to lead to much higher activity from 2014.

Richard Sexton, director of e.surv chartered surveyors was less confident about the state of the market. He said: “The mortgage market is moving on. Even though the economy is in a state of rigor mortis, rates are lower, choice is wider and first-time buyer lending is improving."

He added: “But the 9% increase is rather misleading, and exaggerates the health of the market — particularly the first-time buyer market.

“A large chunk of lending in March was for remortgaging, particularly by landlords who are trying to manufacture enough money to make further additions to their portfolios.“

Mr Sexton said that it was still difficult for many to get mortgages and that potential buyers were trapped in a vicious circle of high rental costs, escalating living costs and rock bottom savings rates.

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