View more on these topics

Market slowing, say experts

Lending in May reached re-cord highs but lending trade bodies still say the housing market is slowing down.

The Council of Mortgage Lenders says gross lending reached a new May record of £30.6bn.

This is up by 12% on April’s figure and up 5% compared with the same month in 2006, when lending hit £29bn.

The Building Societies Ass-ociation also reports a rise in lending for May, with gross advances totalling £4.64bn – up from £4.61bn in May 2006. Gross advances in April am-ounted to £3.77bn.

But both the trade bodies say lending growth is down year-on-year.

Michael Coogan, director-general of the CML, says: “Although the lat- est lending figures represent a record for the month of May, they nevertheless indicate that the market is slowing down compared with the rapid and sustained growth we saw last year.

“We expect lending to ease as we move through this year, but the market will remain in good shape.”

He adds: “Although further interest rate rises will continue to dampen de-mand, we are still on course to meet our prediction of a record £360bn of lending in 2007.”

Adrian Coles, director- general of the BSA, says: “It’s been a slow start to the summer. Society mortgage lending is down year-on-year as the interest rate rises we have experienced since last August have started to take the heat out of the mortgage market.

“We are likely to see more subdued lending as this year progresses and the rate rises continue to feed through. An-other rate rise soon would exa-cerbate the slowdown later in the year and into 2008.”

He adds: “But a reasonably strong economic outlook, especially continuing robust employment, should support lending and property prices.”

Recommended

Market looks fragile but brokers can benefit

It’s not often that I look at statistics and feel depressed, but you only have to drive around your local area and look at the ‘For Sale’ signs to realise that something is going wrong with the market.

Honours for IFS board members

Two board members of the IFS School of Finance have been awarded honours. Professor David Melville has been knighted for his services to higher and further education while Professor Elaine Kempson has been given a CBE for services to the financial services industry.

KGB adds TMW to panel

KGB Packaging has added The Mortgage Works to its packaged lender panel.The Mortgage Works started to expand its sub-prime offering at the end of 2006 and, following a successful pilot, has been growing its distribution channel through packagers. The Mortgage Works sub-prime range is designed to cater for a broad variety of applicants, including full […]

Clarification on financial promotions

Some commentators believe the move towards principles-based regulation means that smaller firms will be able to issue non-compliant promotions and get away with it. The pages of Mortgage Strategy have hosted a healthy debate on this subject over the past few months. For example, in the May 21 issue, Steve Walker, managing director of Promise […]

Pension savings-2015

Overseas transfer charge

By Jim Grant, Senior Product Insight & Technical Support Analyst, Royal London Transfers to overseas pension schemes are not recognised transfers unless the transfer is to a Qualifying Recognised Overseas Pension Scheme (QROPS). A transfer to an overseas pension scheme that isn’t a QROPS is therefore an unauthorised payment and taxed accordingly. However, even if the […]

Newsletter

News and expert analysis straight to your inbox

Sign up