Mohammad Jamei, CML senior economist, said: “Housing market sentiment is holding up well, with demand still strong. This has led to a pick up in approvals, as expected. The more pressing issue is on the supply side, where the lack of private sellers continues to be an obstacle for would-be borrowers.
For this reason, we expect lending in the months ahead to be driven more by remortgaging activity and less by house purchases. Remortgaging will be helped by competitively priced mortgage deals, which are encouraging borrowers to refinance.”
Henry Woodcock, principal mortgage consultant at IRESS, said: “Over the last four years, gross mortgage lending in October has shown a trend to be strong, with last year’s lending figures the highest since July 2008. Recent market conditions and indicators all showed positive signs, so the expectation was that the market would continue grow, which it has, but surprisingly, only by a very small amount.
The outlook for both homebuyers and existing homeowners is still looking positive, thanks in part to the Bank of England's decision to cut interest rates to 0.25% back in August. Mortgage affordability has reached its best level since records began, with monthly mortgage costs hitting a record low for home movers and first time buyers alike.
Record low rates have also helped to offset the impact of the uptick in house prices seen in some areas of the UK during recent times. The combined effect of all of this should make buying a new home - whether for first time buyers or movers - a more achievable prospect for many people as we head into 2017. I still think the mortgage market remains vibrant. Low interest rates, a levelling of house prices and continued consumer confidence have all combined to maintain market momentum.
It’ll be interesting to see if the Chancellor has any good news for the mortgage and housing markets in the Autumn Statement. It’s expected he will confirm earlier announcements of funds towards new homes to be built by small firms, but many would like to see further investment into rental properties.”
Paul Smith, CEO of haart estate agents, comments on the latest CML mortgage lending figures: “Despite mortgages rates reaching historic lows since the Bank of England’s decision to cut base rates in August, lending remains subdued this month. This comes as transaction rates continue to suffer on the month and on the year, due to a lack of housing stock coming onto the market, as sellers and housebuilders continue to move with caution in the volatile market and unpredictable socioeconomic environment.
Lower levels of lending will be also be an outcome of what the Redfern Review described yesterday as historic lows for home ownership in the UK. We need to see the new government following in Thatcher’s footsteps, with a steadfast commitment to home ownership and concrete support for first time buyers. This is about much more than housebuilding, and we need to give Generation Rent better access to mortgages and greater support for those saving for deposits. Unless more is done, young people will become permanently trapped in an expensive rental market.
Philip Hammond must listen to the choir of calls from the industry to ease market conditions and take action in the Autumn Statement. A cut in stamp duty would make a huge difference to first time buyers and abandoning the surcharge would also get landlords to start buying again, increasing the supply of rental properties too. An active property market has benefits for the wider economy, and so we should stop penalising first time buyers, families and landlords for aspiring to buy.”
