Posts with tag: gross lending

Buy-to-let lending remains sluggish

Published On: September 26, 2016 at 9:48 am

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Categories: Finance News

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Mortgage lending rose substantially during August, with gross lending reaching a nine-year high of £22.5bn. However, lending in the buy-to-let sector has remained subdued, according to the latest figures released by the Council of Mortgage Lenders.

This data suggests that, when seasonal factors have been taken into account, lending has been stable over the last few months. Despite this, the figures indicate that remortgaging activity is more prominent in the buy-to-let market.

Slowdown

Buy-to-let activity has seen something of a slowdown, following the introduction of the additional 3% stamp duty surcharge in April. In addition, some lenders are offering more stringent affordability criteria, with one eye on the tax relief changes scheduled for 2017.

Senior economist at the Council of Mortgage Lenders, Mohammed Jamei, said: ‘house purchase activity for buy-to-let continues to remain subdued, even as we move away from the stamp duty change and is firmly down compared to a year ago.’[1]

‘This looks set to continue going forward, given that lenders have been tightening affordability criteria in anticipation of the forthcoming interest tax relief changes in April 2017.’[1]

Buy-to-let lending remains sluggish

Buy-to-let lending remains sluggish

Cuts

A growing number of lenders are moving to cut buy-to-let mortgage rates in an attempt to generate more business from investors. Many lenders are demanding rental coverage of 145% from buy-to-let landlords, due to restrictions of mortgage interest tax relief landlords are able to claim from next year.

Mike Richards, director of London-based Mortgage Concepts Associates, noted: ‘lenders reducing rates is not going to help at all because the Government has crucified buy-to-let.’[1]

‘While an interest rate is one of the concerns, it is not the only concern. People have a finite amount of money for deposits and most people will have to pay 3% extra stamp duty while lenders are increasing their stress rates,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/buy-to-let-lending-remains-subdued

Gross lending up by 29% in June

Published On: July 16, 2015 at 4:44 pm

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Categories: Landlord News

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There was a significant rise in gross lending in June, according to a new report.

Data from research compiled by the Council of Mortgage Lenders showed that total lending rose by 29% in comparison to May to an estimated £20.5bn.[1]

The report showed that year-on-year figures were also up, by 15% on the total of £17.8bn lent in June of 2014.[1]

Rises

In addition, total gross lending in the second quarter of 2015 amounted to £52.2bn, which signified a 17% increase on the £44.5bn recorded in the first three months of the year. This also represented a slight increase of 1% on the same period last year, where gross lending totalled £51.7bn.[1]

‘Activity is picking up after a slow start to the year,’ observed Mohammed Jamei, economist at the Council of Mortgage Lenders. ‘Our lending figure for June may be flattered by the end of political uncertainties related to May’s general election and the underlying picture is likely to be one of only modest recovery. This should be supported by favourable conditions in the economy, though it will be limited by rising house prices and affordability pressures.’[1]

Gross lending up by 29% in June

Gross lending up by 29% in June

Less uncertainty

Richard Pike, Phoebus Software sales and marketing director stated that, ‘as predicted activity in June was more brisk than in the previous few months, which seems to confirm that the much talked about uncertainty around the general election had a real impact.’ However, he went on to say that, ‘with less uncertainty and a more stable political picture, I expect the market to continue to improve.’[1]

Although the Governor of the Bank of England yesterday warned that interest rate rises are coming closer, most believe this will still not happen until 2016, and any rise is likely to be small which means we still have very competitive rates and products for the foreseeable.  This should help the health of the whole of market, especially the remortgage sector which is still subdued,’ Pike concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/gross-lending-sees-29-rise-in-june.html