Mortgage lending declined in February, says CML

on Apr 14, 2015
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The latest data from The Council of Mortgage Lenders (CML) shows that lending to new home owners fell in February across all sectors of the UK residential property market when compared with January. The figures also show that lending is down year on year.

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A total of 40,600 loans, equating to £6.8 billion, were approved and advanced in February this year, while there was a total decline in approved mortgage numbers of one percent on January’s figures and a significant 16 percent fall from February last year. Lending to first-time buyers also dropped by one percent month-on-month and 16 percent year-on-year, with a total of £2.7 billion approved.
Previous home owners were provided with £4.1 billion in loans in February, a decline of two percent on numbers reported for January and some 13 percent lower year-on-year. Lending for the purposes of re-mortgaging experienced a 16 percent drop on January’s figures and registered a 14 percent decline on February 2014, with a total of 21,500 loans advanced.
Despite the buy-to-let sector showing relative resilience, it also suffered a decline in loans, with a 13 percent drop on January’s figures. However, there was a positive annual adjustment in this sector, with 11 percent more loans advanced this year than in the same period of 2014.
While many factors can be attributed to the decrease in mortgage lending, one theory is that the general election is forcing people to hold out on purchasing a property. With the three main political parties having already announced their separate plans for the housing market, a level of uncertainty lingers in the residential property sector. Commenting on this, director general of the CML, Paul Smee said:
“This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months.”
Tighter lending criteria has also been suggested as causing the fall in lending. However, despite February’s lower figures, mortgage lending picked up at the beginning of March, according to chief executive of mortgage broker SPF Private Clients, Mark Harris.
“Despite the dip in lending across the board in February compared with the previous month, the mortgage market started picking up in March, as you would expect for the time of year.
Government schemes aimed at helping first-time buyers are proving to be hugely successful, with the Help to Buy Isa announced in the Budget set to raise awareness even further”

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