The Council of Mortgage Lenders estimates that gross mortgage
lending reached £20.1 billion in May. This is a 12% increase on
both April last month and on May last year, in which £17.9
billion was advanced.
The CML’s buy-to-let forecast for 2017 and 2018 has been revised
down from previous expectations at the end of last year,
reflecting tax and prudential burdens in the housing and mortgage
markets.
The CML now expects buy-to-let lending of £35 billion in 2017 and
£33 billion in 2018, a decrease from £38 billion in each year,
forecast in December last year.
Commenting on market conditions, CML director general Paul Smee
said:
“Remortgage activity and first-time buyers continue to drive
lending this year. Looking ahead, we expect to see this trend
continue, but not as strongly, as the factors supporting lending
are blunted by less favourable economic conditions.
“Buy-to-let had a weak start to 2017, and the sector’s
contribution to overall net mortgage lending has fallen
considerably over the last year.
“While falling mortgage interest rates have helped support
borrowing, tax and prudential measures are exerting pressure on
the buy-to-let market. Following the distortion of the stamp duty
change on second properties last year, we expected a slight
recovery in lending levels. However, this has not materialised,
and we therefore have lowered our forecast for buy-to-let lending
this year and next.
“This re-emphasises the case for avoiding further changes to the
tax and regulatory framework until the effect of these already in
train have been properly assessed.”
Read the full market
commentary on the CML website.
