The money being lent to home buyers hit an eight-year high during 2015 to inject some much needed confidence into the UK property market. Last year saw mortgage lending for first time buyers and second steppers reach a record level since the recession.
The Council of Mortgage Lenders reported that first time buyers alone received a grand total of £46.7 billion during 2015 which is the highest amount since pre-crisis 2007. Buyers already on the property ladder received a further £72.1 billion from mortgage lenders during the same period. Another £55 billion was lent to remortgaging home owners negotiating for a better deal, although this figure is still below half of the equivalent number from 2008.
Several Factors Behind Recovery
A greater choice of deals being available throughout 2015 has been one of the major contributing factors in the mortgage market’s recovery, while an improving economy has seen wages rise and thus provide buyers with the confidence needed to step into the market.
The numbers for 2015 have also been inflated by a significant increase in house price growth, which in turn has meant that buyers have had to borrow more to make their purchases. The government’s Help-to-Buy scheme has also helped those who cannot afford the large deposits to buy homes at the lower end of the market, thus creating more and more first time buyers. This increase in the amount of first time buyers means second steppers and those looking to trade up have been given the opportunity to do exactly that.
Confidence in the Market
Not everyone is confident that the trend over 2015 will continue throughout the rest of 2016 and on into 2017, with some commentators noting the global economy is not in the greatest of health, while there remains speculation about the UK’s continued membership of the European Union which could have a serious impact.
However, some experts do believe there are sustainable good times ahead for the UK housing market. The Director General of the Council of Mortgage Lenders, Paul Smee, is confident that the trend will continue upwards. He said, ‘The market has seen a gradual upward trajectory over the past few years rather than rapid growth, and we’d expect this trend to continue with gross lending steadily increasing over the next two years.’
While it’s always wise to keep the speed bumps and potential pitfalls in mind when forecasting for the future, the numbers are currently saying very positive things about the UK market, and they have been for the past year. As things stand, the mortgage market is in good shape.
