The Council of Mortgage Lenders revealed that their estimate of gross mortgage lending in August experienced an increase of 15% compared to 12 months ago.
The Council of Mortgage Lenders is made up of banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK.
The CML report states that survey indicators for the housing market have recovered in August alongside those for the overall UK economy.
For CML, the bigger concerns for the country’s property future lies within the lack of supply available to the market. In more detail, the market commentary says “the average number of properties per surveyor is close to the lowest it has ever been. This has the potential to reduce the number of transactions, if potential buyers struggle to find properties they want to purchase.”
The new stamp duty surcharge, introduced in April, has blurred the overall picture of property transactions in the first and second quarter of this year. This led CML to the assumption that July and August should provide us with a more accurate, less distort view of the market with transactions starting to soften slightly.
CML’s senior economist Mohammad Jamei said:
Widely voiced fears in recent months about the housing market have proved to be wide of the mark. Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016. However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.
This recovery in sentiment is likely to be down to a number of different factors, including the Bank of England’s monetary stimulus and its introduction of the Term Funding Scheme in August. A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers. The Bank also continues to indicate another rate cut on the cards, if medium term prospects remain unchanged.”