There has been a slowdown in the housing market in recent months
Mortgage lending has slipped in to “neutral gear” as the housing market slows due to a squeeze on consumers’ finances.
The Council of Mortgage Lenders said that gross mortgage lending was £21.4bn in March, 19pc higher than the previous month. But this sum was also 19pc lower than the amount lent in March last year.
This fall was in line with expectations, and was artificially created by a surge last March of buyers looking to purchase buy-to-let properties before stamp duty was hiked by 3pc.
The CML said that there had been a shift away from home movers and buy-to-let landlords, and towards first-time buyers and those remortgaging. CML’s senior economist Mohammad Jamei described lending as being “in neutral gear”.
He added: “We expect this profile to continue over the short term, as low mortgage rates encourage existing borrowers to remortgage and Government schemes help first-time buyers. We do not expect any marked effect from the general election.”
Howard Archer at IHS Markit said that the data “do little to change our suspicion that the housing market is being affected by the increasing squeeze on consumers and their concerns over the outlook”.
“We believe markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price-to-earnings ratios will weigh down on housing market activity and house prices over the coming months. However, a shortage of supply is putting a floor under prices,” he said.
He added that the election would do little to “materially affect” the housing market, which has been “stuttering” for some time.
- [“Source-ndtv”]