Mortgage lending up 30% in February

The Council of Mortgage Lenders (CML) reports 30% growth in mortgage lending in February


Mortgage lending in February 2016 compare to February 2015 has grown 30% to £17.6bn according the The Council of Mortgage Lenders (CML). During the 12 months to December 2015 house prices have risen 7.3% according to Office for National Statistics (ONS) data, reaching £301,000 for the average property.

CML economist Mohammad Jamei said it was “unlikely that there will be any significant acceleration in lending. While there may be a slight current boost to lending as some transactions seek to complete before the 1 April tax changes in the buy-to-let-sector, this is likely to be followed by a slight fall in activity. Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has been improving very recently”.

Fueled by many buyers and buy-to-let investors trying to beat the April deadline for the 3% increase in stamp duty for 2nd properties. Also increases in average wages, lower unemployment, higher property prices due to lack of supply have all helped in the increase in lending.

In mid-March, the EU Mortgage Credit Directive came into force in the UK, part of which includes more stringent rules for buy-to-let lending, such as stricter means-testing of borrowers. It doubles-down on the Mortgage Market Review (MMR) by the Financial Conduct Authority (FCA), a banking regulator, which had already imposed a more demanding assessment regime for loan applicants amid concerns that high house prices were causing buyers to become too indebted.

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Written by: Houseladder