Opinion Former Article

Gross lending up 12% in May and new CML buy-to-let forecast

The Council of Mortgage Lenders estimates that gross mortgage lending reached £20.1 billion in May. This is a 12% increase on both April last month and on May last year, in which £17.9 billion was advanced.

The CML’s buy-to-let forecast for 2017 and 2018 has been revised down from previous expectations at the end of last year, reflecting tax and prudential burdens in the housing and mortgage markets.

The CML now expects buy-to-let lending of £35 billion in 2017 and £33 billion in 2018, a decrease from £38 billion in each year, forecast in December last year.

Commenting on market conditions, CML director general Paul Smee said:

Remortgage activity and first-time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions.

Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.

While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.

This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.
Read the full market commentary on the CML website.

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly mortgage lending press release and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender.

3. The gross mortgage lending estimate for June and market commentary will be published on Thursday 20 July 2017.

4. This month's full market commentary can be viewed on the CML website.

More Articles by Council of Mortgage Lenders / UK Finance ...

Disclaimer: Press releases published on this page are from key opinion formers who promote their organisation's activities by subscribing to a campaign site within politics.co.uk. politics.co.uk does not endorse, edit, or attempt to balance the opinions expressed on this page. The content of press releases are wholly the responsibility of the originating company or organisation.

Comments

Load in comments
wa