The general election will have little effect on the UK’s housing market, according to the Council of Mortgage Lenders (CML), after claiming mortgage lending has reached “neutral gear”.
Gross mortgage lending totalled £21.4bn last month, which was in line with the monthly average over the last year. It represented a 19 per cent rise on February, but a 19 per cent fall compared to the amount lent in March 2016, when £26.3bn was lent after buy-to-let borrowing surged.
The CML revealed that the buy-to-let market has currently cooled down, as has the number of home movers, but first-time buyers and remortgaging drove March’s activity up compared to February.
Since early 2013, there has been a steady increase in the number of first-time buyers, with 342,000 in the 12 months to March 2017. This was the highest number of first-time buyers for a 12-month period in the last nine years.
“Mortgage lending appears to be in neutral gear,” said Mohammad Jamei, CML senior economist.
“Our gross estimate for March is £21.4bn and this is broadly in line with average monthly lending over the past year.
“Within this aggregate level, there has been a shift towards first-time buyer and remortgage customers, away from home movers and buy-to-let landlords.
“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.”
