New estimates from the Council of Mortgage Lenders (CML) reveal that gross mortgage lending hit £18.2 billion in February, dipping 8% below January’s lending total of £19.8 billion, but almost mirroring the £18.1 billion that was recorded in February last year.
In the CML’s market commentary for this month, Mohammad Jamei, senior economist at the CML highlighted that lending is increasingly being driven by remortgage activity, as it grew over 20% over the last twelve months.
It was also noted that the number of first-time buyers rose to over 340,000 in the 12 months to January, unmatched over any 12-month period since early 2008.
“Mortgage lending is holding up well, but under the surface buyers face mixed fortunes. First-time buyers and customers who are remortgaging are driving total lending, while home movers and buy-to-let remain weak,” said Jamei.
“The weakness in home movers means few properties are coming onto the market for sale, which is aggravating a supply demand imbalance that has characterised the market since late 2013. This looks set to continue at least over the next few months, posing an obstacle for would-be borrowers.”
John Eastgate, Sales and Marketing Director of OneSavings Bank, added:
“A nine-year high for gross mortgage lending in January proved that mortgage demand is effervescent, but given the record highs, some moderation was to be expected and is arguably welcomed.
“The Brexit effect and the base rate cut have driven mortgage rates to all-time lows, supporting mortgage activity, most prominently in remortgaging. While buy to let purchases have seen a dip since the changes to stamp duty costs last year, the sector has also seen a surge in demand from landlords refinancing to take advantage of low rates to reduce their costs.
“We should expect to see remortgage activity continue to drive lending levels in 2017 as a lack of supply and stretched affordability, will continue to subdue the purchase market.”
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