According to the latest figures from the Council of Mortgage Lenders (reported by PropertyWire.com in November 2016), the amount lent in mortgages rose very slightly in October, but this rise has been driven by people remortgaging.
The total amount lent in October 2016 was about £20.6bn, which is a slight rise on September’s total of £20.5bn, but it should be remembered that October is a day longer than September. The October figure is down 5% from last year’s, when £21.8bn was lent.
New home purchases have fallen slightly, but remortgages are up around 17% during the last year. Many homeowners are remortgaging to save money by switching to lower interest rates.
The senior economist of the Council of Mortgage Lenders, Mohammed Jamel, said:
“We expect lending in the months ahead to be driven more by remortgaging activity and less by house purchases. Remortgaging will be helped by competitively priced mortgage deals, which are encouraging borrowers to refinance.”
Tax benefit cuts for buy-to-let landlords could also mean decreases in this sector of the housing market
There is a lack of new homes being built and this has slowed down the house market. The government had a target of 200,000 new homes, but it looks as though this target will not be reached.
If more houses are built, with low mortgage interest rates and the flattening of house prices, the housing market could be buoyant. Analysts may be encouraged by the Autumn Statement announcement that funds will be invested in housing.