'Positive signs' for housing market
Mortgage lending shows 'some positive signs' in third quarter, Council of Mortgage Lenders says
Tuesday, 20, Oct 2009 02:22
By Sarah Garrod.
Mortgage lending is showing 'positive signs' with gross mortgage lending in the third quarter at £38.9 billion, up 18 per cent on the previous quarter.
However, experts have noted the results from the Council of Mortgage Lenders (CML) cautiously, as the figures are still 36 per cent down on the same quarter last year.
The CML said there had been a pick up in house purchase activity, but added that this had been off-set by a decline in remortgaging.
CML economist Paul Samter said: "House buying activity is running at considerably higher levels than around the turn of the year. However, it remains weak on any historic comparison and is unlikely to rise much further given the constraints the lending community faces and a still difficult economic backdrop.
"But there are some positive signs to look to. While the retail side, both in terms of mortgage and savings activity, has thrown up few surprises, it is encouraging that the wholesale markets have begun to thaw.
"Some of the UK's highly rated institutions have been able to issue structured finance products backed by mortgages in recent weeks. This is only an early sign of wholesale investors tentatively coming back into the new issuance market, but is welcome nonetheless."
David Brown, commercial director of LSL Property Services, added that despite the CML's news, "we shouldn't be jumping for joy yet".
"The number of transactions taking place is being reined in by the limited supply of affordable mortgages to two crucial groups- first-time buyers and property investors," he added.