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TODAY'S OTHER NEWS

August strongest month for lending since financial crisis

August was the strongest month for gross mortgage lending since the financial crisis with loans totalling £20 billion.

That is 12% higher than August last year, when mortgage lending stood at £17.8 billion.

Brokers have welcomed the figures, from the Council of Mortgage Lenders (CML), as a sign that this year's early housing market uncertainty is now over.

Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.

“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "With the uncertainty that plagued the housing market at the start of the year well out of the way, and lenders keen to do lots of lending, lost ground looks set to be made up in the second half.”

Harris said mortgage rates remain competitive as well. "Despite fears that we have seen the best of the fixed rates, lenders have good capacity to lend, with five-year deals still available at less than 2.5%.”

He said now is a good time to remortgage, with some excellent deals available and talk of a rate rise on the horizon.

“The mortgage market remains over supplied with lenders having more money to lend than there are people looking for mortgages.

“This means criteria will have to loosen and rates will have to remain low to ensure lenders hit their volume targets.”

Harris added: “For many borrowers the main issue is not so much finding a cheap mortgage rate but being able to prove affordability to satisfy the lender and meet tighter criteria post Mortgage Market Review.”

Stephen Smith, director, Legal & General Mortgage Club & Housing, also welcomed the rebound in mortgage lending after a slow start to the year caused by pre-election uncertainty.

"The resultant backlog of prospective buyers is driving up demand in months that typically see less activity.

“We expect lending to continue increasing as rising wages and low inflation are likely to encourage more people to the market in the future. That said, the lack of supply continues to be the main threat to the market.”

Adrian Gill, director of Your Move and Reeds Rains estate agents, said that mortgage demand is firing on all cylinders, both for first-time buyers and existing homeowners.

“Sellers aren’t matching up with buyers, and this competition is steadily speeding up property prices.

“Meanwhile, for those who do already own their home there is also a real impetus to remortgage.”

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