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|CML Gross Mortgage Lending for June - commentary|
|Thursday, 21 July 2016|
Responding to the CML release, Henry Woodcock, principal mortgage consultant at IRESS, said: “It may have been a surprise to some that gross lending was up in May by 4% and now the momentum has continued into June, rising a considerable 16% from May to £20.7 billion. This is the highest June figure since 2008.”
“The positive indicators were there if one looked beyond the rhetoric of the daily bombardment of contradicting referendum messages. Mortgage lenders stayed calm, rates stayed low and many lenders looked to build market share with competitive deals.
“One month on from the leave vote, rates are predicted to stay low for another two years. Investment in the mortgage market continues with new lenders such as Atom Bank and others coming to market in the next six to 18 months.
“House prices have not dropped drastically. In fact, figures from the Office for National Statistics released on Monday show the average house in the UK now costs a record £211,000, up 8.1% on a year ago.
“We could continue to see an increase in lending over the coming months, but the longer term lending outlook remains a bit ‘foggy’. The EU exit decision came as a surprise to many and a lot will now depend on how things settle following the initial jolt. The consultancy Centre for Economics and Business Research (CEBR) has suggested a construction slowdown may be on the horizon – which will only exacerbate the housing crisis and could lead to fewer affordable houses being built.
“We are in uncharted waters making things very hard to predict with any amount of certainty.”
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