The mortgage industry has shown signs of recovery, as mortgage lending for August rises to its highest level since before 2007.
As August figures rose, the Bank of England stated that the Help to Buy scheme would no longer be required, as the range of mortgages available for those with small deposits had increased. The property market has suffered a few setbacks this year, with stamp duty increases in April followed by the Brexit vote, which caused uncertainty among buyers.
However, the Council of Mortgage Lenders has released new data which indicates that the previous uncertainty may now be over, and mortgage lending is increasing again. In August this year, £22.5bn was given in mortgages, an increase of 15% on August 2015’s figure and a 7% rise on July’s figure.
It is the largest amount to be loaned out in August since prior to 2007, when the financial crisis happened. According to the senior economist of CML, Mohammed Jamei, the cut in interest rates and low cost funding being offered to banks by the Bank of England is partially behind the increase. Analysts are now expecting more mortgage products to arrive on the market with rates below 1%.
Jamei stated that mortgage approvals were expected to increase, although still at lower levels than previously, due to the strict affordability checks in place and shortage of housing availability. This is good news for first time buyers and those people looking for a new mortgage deal. Mortgage advisers study on a CeMAP course to ensure that they are equipped to give the most suitable advice.
