Lending rises year-on-year for the first time in 5 months

Gross lending rose year-on-year for the first time in five months in March, according to the Council of Mortgage Lenders.

Lending hit an estimated £16.5bn in March, up 7 per cent on the £15.4bn advanced a year earlier. Not since October has lending been up on an annual basis.

An estimated £44.9bn was lent in the first quarter, which is 3 per cent down on Q1 2014.

CML chief economist Bob Pannell says: “The underlying lending picture is stabilising. Sentiment and activity are showing early signs of improvement, and should be further supported by the effects of stamp duty reform.

“We expect to see lending strengthen over the next few months, albeit from a relatively sluggish start in 2015.”

IRESS principal mortgage consultant Henry Woodcock says: “Despite the ongoing political uncertainty in the lead up to the general election, and the ongoing drag of tightening criteria for many borrowers, the market has weathered the storm. Mortgage rates on decent length fixes are at unprecedented lows, stimulating demand. Furthermore, the fall in oil prices has helped reduce the rate of inflation, boost real incomes and delay an increase in base rates, meaning more money in buyers’ back pockets.

“However, the election does remain a fly in the ointment, and as we move closer to 7 May, we can expect the waters to muddy somewhat. With housing a key pillar of parties’ manifestos, we may see the effect of a wait-and-see approach in April and May’s lending figures.”