Mortgage market still 'see-sawing'

 

The mortgage market has continued to “see-saw” this summer after new figures showed an 8% rise in lending between June and July.

Loans for home buyers and remortgages rose to £12.7 billion in July, its highest level since September, according to the Council of Mortgage Lenders (CML), which was 2% higher than the same month a year ago.

But it said the overall market was "broadly flat", while lending figures in recent months "see-sawed" as a result of distortions caused by one-off events such as the Olympics and the Diamond Jubilee.

It will not be until September that a clearer picture of the market emerges and, in the meantime, the CML said it was too early to say whether the recently launched £80 billion Funding for Lending scheme has encouraged banks to lend more to aspiring home owners.

CML market and data analyst Caroline Purdey said: "We look forward to the September figures when the distorting effects of the Diamond Jubilee and the Olympics should largely have worked their way through."

But Mark Harris, chief executive of mortgage broker SPF Private Clients, warned that "any sustained recovery in the housing market is a long way off".

He added: "The focus on the Olympics, the continuing eurozone crisis and weak consumer confidence is likely to result in a slight drop-off in transactions over the next couple of months.

"However, the Funding for Lending scheme should deliver more competitive mortgage rates in coming weeks and these are already filtering through.

"It might be too early to call the end of the mortgage famine but there are certainly encouraging signs."

There have been a number of cheap five-year fixed-rate deals launched in recent weeks.

This has been seen as an encouraging response to the Treasury and Bank of England's lending scheme, which aims to boost the economy by unclogging the flow of credit to home owners and businesses.

Previously, many homeowners had been happy to stay on their lender's standard variable rates after mortgage deals expire, but there is now expected to be a surge in remortgaging amid the more competitive rates.

However, the deals have been criticised because they are mainly aimed at borrowers with large deposits, and there are fears the scheme will fail to boost lending to first time buyers who need affordable 95% loan-to-value mortgages, which is seen as the key to revitalising the market.

Ashley Brown, director of independent mortgage broker Moneysprite, said: "Those first-time buyers that are managing to buy are almost always being supported by their parents.

"Sooner or later the number of parents that can afford to stump up a lump sum is going to dwindle. When that happens expect loan numbers in this sub-sector to once again drop off a cliff."

PA

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Financial Adviser

    £20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

    SThree: Graduate Recruitment Resourcer

    £20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

    Guru Careers: Application Support Analyst / 1st Line Support

    £25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

    Guru Careers: .NET Developer / Web Developer

    £45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence