The Council for Mortgage Lending (CML) has released new figures showing mortgage lending has reduced over the last four months.
Figures from the CML estimates gross mortgage lending reached £16.9 billion in November, 9% lower than the October figure of £18.9 billion.
The level of lending has reduced over the last four months after reaching a high for the year of £19.7 billion in July and is now the same level seen in November 2013.
Mortgage lending to increase
Although mortgage loans to first time buyers, home movers and remortgage buyers are lower than a year ago, reform in stamp duty will provide a short term boost in the next few months.
The CML publishes the gross lending in the market. This is the amount of loans lenders advance to homebuyers but does not include the value of loan approved which is the amount of credit secured on a property.
For 2015 the gross lending predicted by the Council of Mortgage Lenders is £222 billion rising to £240 billion in 2016 compared to the actual figures in 2013 of 173.9 billion.
Already for 2014 gross lending is at £154.1 billion and projected to be about £200 billion by the end of the year. In the UK there are 11.1 million mortgages with loans of worth over £1.3 trillion.
For older homeowners there is higher activity with equity release mortgage buyers accessing cash in their property to repay an interest only mortgage or even pay for care at home.
Stamp duty to increase mortgage advances
The Council of Mortgage Lenders is expecting the new Budget changes in the stamp duty to increase the gross lending for the next couple of months.
Information provided by HM Treasury shows that the average Help to Buy property of £185,000 currently costs £1,850 and the new stamp duty rules saves £650 reducing the cost to £1,200.
For a home mover buying an average family home worth £275,000 stamp duty was £8,250 and now saving £4,500 with a cost of £3,750. For London the average cost of a home is £510,000 and stamp duty has reduced £4,900 from £20,400 to £15,500.
For properties over £2 million the cost has increased from £147,000 to £165,750. The changes will benefit home buyers of average family homes more than other types of buyers.
For older remortgage buyers, rather than downsizing and paying stamp duty tax the equity release buyer can agree a lifetime mortgage and remain in their home.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage monthly cost calculators, equity release calculator and property value tracker chart.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise or gift a child or grandchild the deposit on their first home.
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