Lending reaches record levels
These figures represent the highest March lending figures on record, and a 34 per cent leap from March 2005’s total of £21.2 billion.
Michael Coogan, director-general of the CML, attributed the rise to seasonal adjustments and city bonuses. Commenting on the findings, he said: “The record lending in March reflects the high level of loan approvals in the Autumn and Winter as house prices stabilised and consumer confidence returned to the market. House-buying activity was particularly strong around London reflecting high city bonuses, and this is probably a factor behind the strength of lending.”
Coogan added his belief that changing trends meant certain sectors were peaking, but did not expect the market to fall. “Mortgage approvals remain high, but the upward trend in seasonally adjusted approvals for house purchase witnessed over the past year seems to be drawing to an end. This suggests underlying activity is peaking and is in line with our forecasts. However, we expect remortgaging to remain strong and support a robust level of lending throughout the Spring and Summer,” he added.
The CML added its expectations that March’s seasonally adjusted lending is likely to reach a record high, a sentiment shared by Phil Perry, director at Ark Financial Planning. He said: “From what I have seen, everything is geared towards growth and there still seems to be people buying properties. There is also an indication that interest rates will fall by the end of the year, which will have a further affect on the market.”
He added that he expected the buy-to-let market to continue to rise as a result of increased media coverage on the area, but said the buy-to-let market was best suited to investors with large amounts of money. “The buy-to-let market is buoyant, but is also a little saturated. Property values are high in this sector and investors must have serious capital.”