The latest release of date from the Council of Mortgage Lenders (CML) shows that lending in May increased 12% when compared to April’s figure. Standing at £20.1 billion, it is also ahead of the May 2016 figure when it stood at £17.9 billion. However, it’s not all positive growth. The CML has also revised down its forecast for buy-to-let mortgages for 2017 and 2018.In December 2016, it had forecast lending of £38 billion in both 2017 and 2018. These figures have been reduced to £35 billion in 2017 and £33 billion in 2018.
Paul Smee, Director General of CML commented:
“Re-mortgage activity and first-time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions.
Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.
While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.
This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.”
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