7% month-on-month increase in mortgage lending brings relief to London property market
Amid speculation over the future of the UK property market comes the revelation that gross mortgage lending increased by 7 per cent in August, providing fresh impetus to the UK housing market.
According to data released by the Council of Mortgage Lenders, gross mortgage lending was approximately £22.5 billion in August - 7 per cent higher than July’s lending of £21.1 billion. In addition, mortgage lending increased by 15% year-on-year from £19.5 billion in August 2015 to £22.5 billion August 2016. This is the highest mortgage lending figure since 2007, when gross lending had reached £33.6 billion in the UK and the housing market was at its peak.
The momentum in the housing market is likely to continue into October, as sales enquiries have increased. The role of the Bank of England in facilitating the growth cannot be ignored as the monetary stimulus provided by the bank has helped the economy stabilize and propelled the growth of the core sectors.
The Council of Mortgage Lenders’ announcement reflects the sentiments of investors in the UK. In July, they adopted a “wait and watch” policy as a consequence of which mortgage lending witnessed a drop. However, when the market bounced back in August, investors decided to take their investment plans forward.
It is evident that despite multiple obstacles the housing market continues to offer attractive returns. There has been a good demand for buy-to-let properties, as the rental yield is growing. Enquiries from overseas investors have also remained active with many of them keen on exploring new developments and the overall market sentiment is favourable.