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Mortgage market May 2015


The availability of cheap credit is vital to the health of the housing market.

Nick Barnes

Mortgage market

- Reversing the declining trend of the previous two months, gross mortgage lending in March rose by 21% compared to the previous month and was 7% higher than in March 2014.

- Latest Halifax data indicates that affordability – as measured by mortgage repayments as a percentage of income - continued to improve at national level in Q1, with the ratio falling from 29.2% in the previous quarter down to 28.9%. However, in London affordability worsened slightly from 44.0% in Q4 last year to 44.1%.

-The Financial Conduct Authority (FCA) has announced plans to investigate the mortgage market to see if there are “competition” issues that are failing consumers. In its 2015/16 business plan, the FCA said it would assess barriers to competition in the market this autumn and will then launch a market study in early 2016. However, the regulator was unable to say in detail what these “barriers to competition” would be, except that it would look at things like being able to switch between providers and consumers’ ability to access credit.

- Buy-to-let lenders who are members of the Council of Mortgage Lenders (CML) are adopting a new statement of practice, designed to provide clarity about how responsible lenders operate. The statement reflects existing good practice and aims to ensure that there is a clear explanation of the obligations of buy-to-let borrowers on their mortgages and is seen as further evidence that the sector is expanding. Some 31 lenders representing an estimated 90% of the buy-to-let market have already adopted the statement of practice and all CML members who offer buy-to-let mortgages are expected to adopt it over the course of 2015.

- Bank of England data reveal the extent to which mortgage interest rates have come down over the past 12 months. Assuming a 75% deposit, interest rates on average 2 year fixed deals fell by 59 basis points (bps) between April 2014 and April this year while rates on five year deals dropped by a hefty 76 bps. Rates on 10 year fixed mortgages fell by 55 bps between October last year and April.

Mortgage Market May 2015, Chestertons Estate Agents

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Nick has more than 20 years’ experience within the property research arena.

Nick Barnes

Nick Barnes

St Magnus House

020 3040 8406