Gross mortgage lending reached an estimated £21.4 billion in March according to figures published today by the Council of Mortgage lenders. This brings total lending for the first quarter of 2017 to an estimated £59.1 billion, down 4% on Q4 2016.
The figures cannot be reasonably compared to the same period last year when the market was distorted by a peak in mortgage lending of £63.0 billion, prompted by a surge of borrowers rushing to beat the introduction of the Stamp Duty surcharge.
Commenting on the figures, CML senior economist Mohammad Jamei said:
"Mortgage lending appears to be in neutral gear. Our gross estimate for March is £21.4 billion and this is broadly in line with average monthly lending over the past year. Within this aggregate level, there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.
"We expect this profile to continue over the short-term, as low mortgage rates encourage existing borrowers to remortgage and government schemes help first-time buyers. We do not expect any marked effect from the General Election."
John Eastgate, sales and marketing director of OneSavings Bank said:
“Mortgage activity may have dipped in the first quarter and the forthcoming election will clearly add some complexity to the year, but the last few years have demonstrated very clearly that the mortgage market can negotiate the even the trickiest political landscapes, so with interest rates looking set fair to stay low, relatively strong levels of demand will persist.
“Long-term constraints still provide a note of caution. Demand still outweighs supply, adding pressure to the purchase market. The LISA [Lifetime ISA] may support demand in the long-term assistance, but if we don’t see supply increase, then affordability stretch will remain the stumbling block for prospective buyers.”
The CML will publish more detailed lending figures for March and Q1 2017 on 17th May including data on purchases and remortgages for buy to let and first-time buyers.
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