Mortgage lending points to market recovery, say property finance specialists


The latest data from the Council of Mortgage Lenders shows that gross mortgage lending was steady in August at an estimated £16.6bn – almost identical to July’s gross lending of £16.7bn and 28 per cent higher than August last year.

This consistency from month to month is perhaps surprising given all the talk of an overheating housing market. However, it is extremely encouraging, suggesting a sustained and considered improvement in the housing market, which is more likely to lead to a measured recovery, rather than a house-price bubble.

Five-year fixed-rate mortgages

Swap rates have fallen again in the past week so while a few lenders have raised or simply withdrawn their longer-term fixed rates, borrowers shouldn’t panic about a sudden surge in pricing on fixes. If you see a rate you like, go for it but don’t fret too much if you plan to buy or remortgage in a few months’ time. Most lenders will let you reserve rates for up to six months so borrowers can do this if they still have concerns.

Getting a large loan

A couple of high-street lenders are piloting large loan products, increasing the options available to those looking for a large mortgage. However, the private banks still remain a good option for those looking for a large mortgage as they tend to be more flexible on terms, usually offer interest only and will also consider older borrowers.

The economy is turning a corner but let’s not get too carried away: there is still a long way to go. The danger of over-reaction to a house-price bubble is that any confidence in the market is extinguished just as it is establishing itself. Lending volumes and house prices are still well below pre-crisis levels.

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Adrian Anderson
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Adrian Anderson