Cusp of recovery despite lending dip
Mohammad Jamei, CML economist, said: “Although lending in April was fractionally down on the previous month and year, this followed a stronger March.
“Overall, we now seem to be on the cusp of a modest lending recovery. Household finances are generally improving as earnings growth continues to outstrip inflation, and mortgages are being offered at extremely competitive rates. As a result, we expect to see stronger lending in future months.”
John Eastgate, sales and marketing director of OneSavings Bank, said with mortgage rates remaining near historic lows underlying activity was likely to remain stable.
He added: “On top of this, we have seen deflation take hold, pushing back the prospect of a hike in interest rates. Combined with improving earnings, this will boost the borrowers’ budgets.
“There are already signs that mortgage activity is on the increase with big ticket purchases returning and the market expects positive momentum to build as the year progresses. Yes, affordable mortgages for those with the smallest deposits remain thin on the ground, holding back first-time buyer levels, but an increasingly buoyant buy-to-let market will support total lending in 2015.”