Council of Mortgage Lenders
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Latest property news
Repossessions hit the highest number since 2014
The latest official data show that mortgage lenders’ claims for home repossession in England and Wales rose to the highest since late 2014 during the three months to June, this year.
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First time buyers are back in the market
First time buyers are back with a vengeance borrowing £5.9 billion in June, up 26% on June and 9% on the same month in 2016, the Council of Mortgage Lenders latest figures show. The increase is on the back of first time buyers taking out 36,000 loans in June, 22% more than the month before. The increase is more than a blip. Figures from the CML, which is soon to be renamed UK Finance, show that during the second quarter of this year first time buyer borrowing increased by 18% taking out 91,400 loans. “June’s figures show a busy month in the mortgage market, with home movers having their highest monthly activity levels for over a year and an especially high number of loans for first time buyers,” says Paul Smee, Head of Mortgages at UK Finance (pictured, left). “But there are also signs of a softening market and we are not anticipating that this performance will be sustained in the second half of 2017.” Home buyer borrowing also jumped during July, increasing by 26% month-on-month and 15% year-on-year although buy-to-let borrowing remains subdued, but still rising, by 3% both by month and year comparisons. The CML data also reveals that…
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Mortgage lending recovery lead by first-time buyers, says CML
Last month mortgage lending reached £18.9 billion, 6% lower than December but 2% more than last January, says the Council of Mortgage Lenders (CML) The CML also says last month’s total was the highest for a January since the pre-financial crash peak in 2008. The number of loans approved has also been increasing since last summer’s Brexit-induced quiet property market, and the CML now says it expect to see 71,000 mortgages approved every month, 10,000 a month more than the period following the EU Referendum. But the CML’s senior economist Mohammad Jamei says the figures mask a twin-track market. “Weakness in buy-to-let and home movers have been offset by an increase in first-time buyers and remortgage lending,” he says. The CML says this trend shouldn’t be a surprise because most government schemes have been aimed at helping boost first-time buyer numbers and that, as a result, there were 360,000 first time buyers during 2016, up 8% on 2015. “A continuing acute shortage of homes being offered for sale is one aspect of a broken housing market, that looks unlikely to resolve in the near term,” says Jamei. Jeremy Dunscombe from the Legal & General Mortgage Club, says: “The start of…
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Has the CML changed its tune on longer tenancies?
The Council of Mortgage Lenders (CML) has backed the government’s recent housing White Paper and says there is an “increased appetite” among lenders to advance mortgages to landlords who accommodate renters on longer tenancies. The White Paper sets out how the government is planning to create more secure, longer tenancies for families that would last up to three years and give people ‘the security they need to plan for the future’, Prime Minister Theresa May says in its introduction. Although the initiative has encountered criticism from some quarters of the property industry including eMoov chief execute Russell Quirk, who described the White Paper as ‘recycled rhetoric’, it has been welcomed by most agents and consumer groups including housing charity Shelter. The CML says it is keen to assist the government as it ‘works towards a market in which those renting can find a tenancy to suit their needs’. “Lenders already contribute to the funding of private and social rented housing, as well as owner-occupation, so we welcome and are comfortable with the cross-tenure approach in today’s white paper,” says Paul Smee, the CML’s director general. “We are now ready to work with the government, and with members and others, on the detailed implementation of…
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Home repossessions at 35 year low
Home repossessions by banks dropped by almost 25% last year the Council of Mortgage Lenders (CML) has revealed. During 2016 some 7,700 homes home were taken back by banks, down from 10,200 in 2015, the lowest number since 1982. The CML also says that mortgage arrears were down last year by 7% and that it is part of a long-term trend (see graph). Repossessions peaked in early 2009 following the financial crisis at approximately 50,000 a year then began a prolonged year-on-year decline as the economy recovered, with some of the largest reductions over the past two years. “It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates,” says Paul Smee (pictured, left), director general of the CML. “But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again. “Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible.” The number of buy-to-let mortgage arrears during 2016 also fell, by 11% compared to the year before,…
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CML predicts fewer buy-to-let property purchases in 2017
The Council of Mortgage Lenders (CML) says the number of houses bought by landlords next year is likely to fall as several headwinds reduce demand for buy-to-let property. This includes the recently-introduced additional 3% Stamp Duty for buy-to-let purchases, the Prudential Regulation Authority’s buy-to-let lending stress tests starting on January 1st, and the new and less generous tax allowances for landlords, which kick off in April next year. Consequently, CML director general Paul Smee (pictured, below) says that although the overall mortgage market is resilient and will ‘plateau’ during 2017, buy-to-let lending is to likely to decline. The CML predicts that total lending for all types of mortgages in 2017 will be £248 million, approximately the same as 2016, before increasing in 2018 to £252 billion. But lending for new buy-to-let purchases is to decline in both 2017 and 2018, it says. “We expect any modest strengthening in home-owner lending to be rather offset by a less active house purchase market in buy-to-let, as both tax and regulatory changes bite on landlords,” says Paul. But lending is not the only dial on the buy-to-let market to be going down. Lender Landbay says average UK rental growth during 2016 halved from 2.34% to…
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FCA to investigate mortgage lending via estate agents
Estate agents who introduce customers to in-house or third party mortgage brokers are to be investigated by the Financial Conduct Authority (FCA) as part of a new wide-ranging look at competition in the home loans market. The aim of the review is to see if customers are being offered the best deals, advice and whether links between industry players limit choice, all part of a wider government drive to reduce the cost of buying a home. There are currently 11.1 million home loans held in the UK worth £1.3 trillion, according to the Council of Mortgage Lenders. “As a mortgage is likely to be the biggest financial commitment most people make in their lifetime, we’re keen to ensure that competition in the mortgage sector is healthy and working to the benefit of consumers,” said Christopher Woolard, the FCA’s executive director of strategy and competition (pictured). This will include a close look at how estate agents, conveyancers, surveyors and developers all introduce customers to mortgage lenders or brokers. But when launching the full review the FCA singled out estate agents for criticism, saying that some customers could be coming under pressure from estate agents to use certain brokers if they want…
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Are buyers finally returning after the Brexit vote?
Purchasers are returning to the market following the Brexit vote according to figures from both the Royal Institute of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML). RICS says this morning that buyer demand has grown for the first time in seven months and that “market confidence continues to improve following post-referendum jitters”. Its survey of RICS members reveals that last month eight percent more of them reported an increase in buyer enquiries compared to June, when 34% of respondents reported a drop. “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer,” says Simon Rubinstein, RICS Chief Economics. “Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.” The CML also published an uptick in activity within the market this week. It revealed that the number of people borrowing money to buy homes increased by 14% month-on-month to £12.2 billion and up 11% year-on-year. First time buyers played a significant role in this activity increase, borrowing £5.5 billion during August, up 24% on the same month last year. “House…
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Mortgage lending up to £18.2 billion in May
CML reports the highest figure since 2008 and they “don’t expect significant house price falls.”
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Mortgage lending hits 7-year high
Mortgage lending has surged to its highest level since 2008 as borrowers rush to take advantage of highly competitive home loan deals. Fresh data provided by the Council of Mortgage Lenders (CML) shows that lenders advanced a total of £21.8 billion last month, up 19 per cent on the £18.4 billion lent a year earlier and 8 per cent on September’s total of £20.1 billion. October’s lending total is the highest since July 2008, when lenders advanced £23.6 billion. The CML said total mortgage lending across 2015 looks likely to top its previous estimate of £209 billion as mortgage lenders continue to compete for business by keeping borrowing rates low. Separate figures from MoneySuperMarket revealed that the average two-year fixed-rate mortgage rate fell to 2.68 per cent in October, from 2.72 per cent in September, while the typical three-year fixed rate on offer dropped from 3.1 per cent in September to 3.08 per cent in October. Bob Pannell (left), the CML’s Chief Economist, commented, “As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved. This looks set to continue over the closing months of the year with the factors helping support…
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