With the uncertainty caused by the General Election out of the way, gross mortgage lending has edged up by 2 per cent in May compared with April, according to the Council of Mortgage Lenders. This is in line with other forecasts, pointing to a gentle recovery in a housing market which has been paralysed for many months.
Lenders are doing their bit; they are keen to lend and offering rock-bottom mortgage rates to entice borrowers. These low rates are likely to continue into the autumn and once the traditional summer lull is out of the way, we could see a real pick-up in activity.
The main problem is lack of housing stock, which will continue to support prices. The gap between what people earn and what they can afford to buy continues to be an issue. There is little incentive to sell when there is a lack of choice as to what to buy, while tougher affordability criteria as a result of the mortgage market review may also make it harder for borrowers to get the mortgage they need.