Gross mortgage lending reached an estimated £20.4 billion in September, bringing the total for the year to £246bn, according to the council of mortgage lenders. this is the highest annual gross lending figure since 2008 and we expect this to increase in 2017.
2016 turned out to be an encouraging year for the mortgage market, despite significant headwinds created by the increase in stamp duty for landlords and second homeowners in April and the uncertainty surrounding the referendum. Record low mortgage rates were responsible for this resilience, with many borrowers remortgaging to take advantage of the lowest rates ever, while first-time buyers were able to take advantage of an increase in the number of high loan-to-value deals.
Moving into this year, Swap rates have settled down since the beginning of January and several lenders have announced competitive deals on the back of these. HSBC, Barclays and Aldermore have all launched cheaper rates this week and an appetite to do business among lenders shows no signs of abating.
The main six lenders, along with a number of new entrants and the challenger banks – who grow ever stronger – are all likely to compete with attractive deals this year. Subsequently, we expect 2017 to exceed £250bn with a likely market of approximately £265bn.
This is particularly good news for those borrowers who require a straightforward ‘vanilla’ mortgage but we would like to see more tweaking of criteria and innovation to make it easier for other groups such as older borrowers and the self-employed to access mortgage finance rather than just cheaper rates.