It feels like we have just sailed through a brief and unexpected lull in lending activity, with some conflicting indicators about the likely direction of travel.
Whilst the industry is well used to a summer down turn, in August this year it seemed there was a more noticeable fall away.
Dependent on which set of figures you use, purchase, buy-to-let and remortgage lending were all estimated to be down between 15-20 per cent. There is anecdotal evidence that perversely, as the general economy is an improved one, more people felt confident enough to take a holiday than in previous years. That sounds feasible but can the cooling be attributed to that effect alone?
MMR has also been cited as an anchor but then lenders are also commenting publically and privately that they are largely over that particular road bump.
Were we all transfixed by Wimbledon and the Scottish referendum perhaps?
In any regard, with the UK back to work, early September appears to be showing some signs of increased activity with agency and financial adviser friends sounding more positive than for a few weeks. Lenders themselves seem to have been surprised by the slowing and with a limited amount of time to claw back towards annual target run rates, we have seen a flurry of new products and rates, indicating the lenders are serious about securing their market share and targets. The CML are meanwhile predicting ‘a gentle slowing of lending activity’.
The good news is that on any longer scale, all trends in lending are positive and the market is in better shape in terms of regulation and good practice that it has been for years. The fundamentals are strong.