Mortgage Advice Bureau comments on the CML’s monthly lending trends for January

Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), said:

“While January saw the usual seasonal fall in house purchase lending, it’s encouraging to see lending has increased annually, particularly for first-time buyers. Lenders clearly have an appetite for business, and borrowers who meet lenders’ affordability requirements are benefiting from very competitive mortgage rates. With the base rate going nowhere fast, consumers should continue to reap the rewards of these low rates for some time.

“Rock-bottom mortgage rates have also played a key role in the recent increase in remortgage lending. With house prices continuing to rise, homeowners are well placed to take advantage of their growing equity at highly affordable rates. Borrowers on their lenders’ standard variable rate (SVR) in particular stand to make significant savings by swapping to a new deal.

“While it is good to see the mortgage market is able to support more borrowers in spite of rising house prices, policymakers need to keep an eye on market accessibility. Figures from the Bank of England this week* show the proportion of mortgages with high loan-to-value (LTV) ratios is falling, meaning would-be borrowers are having to raise ever larger deposits. It is important that the market remains open to those with more modest incomes, so it would be great to see more policies aimed at supporting affordability in next week’s Budget.”