Mortgage market "on a plateau" - CML market commentary
Published: 22 October 2014 | Author: Bernard Clarke
Gross lending in the third quarter of the year totalled £55.5 billion, 8% more than in the second quarter and 13% higher than in the same period last year, our data showed. Overall, however, market conditions appear to be easing, and there is growing evidence that mortgage lending activity – and the housing market – are sitting on a plateau.
Weaker growth prospects in a number of major economies, including the eurozone, are creating uncertainty over when there is likely to be an increase in UK base rates. Bank of England chief economist Andrew Haldane has indicated that rates may stay lower for longer, partly as a result of increased geo-political and financial risks.
Our most recent market commentary, published on Monday, noted that the pronounced recovery in London appears to be beginning to run out of steam and that house price growth nationally may be slowing. In former housing cycles, there have been significant ripple effects radiating out of the capital, but we think that that is less likely on this occasion.
London’s housing market has been driven by some unique factors, over and above the general support provided by the improving economy, consumer sentiment and the availability of mortgage credit. These factors will for the most part continue to contribute to modest recovery of the market away from the south east, we believe.