News Column

UK Home Loans Stable In May

June 19, 2014

LONDON (Alliance News) - UK mortgage lending remained stable in May from the previous month, indicating a slowdown partly due to new mortgage rules, data from the Council of Mortgage Lenders, or CML, showed Thursday.

Total mortgage lending amounted to GBP 16.5 billion in May, the same as in April. However, on a year-over-year basis, total value of home loans rose nearly 12% in May.

CML Chief Economist Bob Pannell commented, "Market indicators point to a slowdown in activity levels, in part associated with new mortgage rules, but it is unclear how lasting this will be."

"Implementation of the new regulatory regime is likely to have disrupted the normal patterns of activity, creating statistical "fog" around the published figures. As this lifts over the coming months, a clearer picture as to any lasting impact of the Mortgage Market Review rules on lending activity should emerge."

The MMR rules took effect only late April. According to IHS Global Insight economist Howard Archer, it is possible that some banks raised their mortgage lending standards before the new regulations kicked in.

The recent survey by the Royal Institution of Chartered Surveyors, or RICS, revealed last week that there are signs of the very strong upward momentum starting to come off the housing market.

The RICS attributed the slowdown to a lack of supply, higher prices, more prudent lending measures and some of the talk from the Bank of England that are creating a level of caution among sellers and buyers.

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Source: Alliance News

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