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CML: Mortgage market experiences strongest April since 2008

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The mortgage market experienced its strongest April since 2008, according to figures released today by the Council of Mortgage Lenders.

In April, lenders advanced an estimated £12.1bn to borrowers, up 4.3 per cent on the £11.6bn advanced the month before.

April’s figure was also up 22.2 per cent on the £9.9bn advanced to borrowers in April 2012. However, the trade body says year-on-year comparisons are misleading as last April’s figure comes immediately after the stamp duty holiday ended.

The last time gross lending in April was higher was in 2008, when lenders advanced £26.4bn to borrowers. In April 2009, 2010 and 2011 lenders advanced £10.4bn, £10.2bn and £10bn, respectively.

April’s gross lending performance is the best since November, when £13bn was advanced to borrowers.

CML chief economist Bob Pannell says: “Our forward estimate is that gross lending in April was £12.1bn. This would have been 4 per cent up on March. The comparison with April last year – 21 per cent higher – is flattered by the temporary dearth of house buying activity immediately following the closure of the stamp duty concession.

“The true underlying position is that April is likely to have been one of the strongest months for lending activity since late 2008, but not as strong as the year-earlier comparison suggests. Gross lending on a seasonally adjusted basis has been running comfortably above £12bn for several months, but this is still barely half the average level of lending seen in 2003-4.”

SPF Private Clients chief executive Mark Harris says: “April was another strong month for the mortgage market with an uptick in the number of new deals being taken out and a welcome rise in the number of first-time buyers. Funding for Lending has had a significant impact on the market: practically every move made by lenders in the past three months has been positive, either in terms of pricing, criteria or both.

”However, growth is still steady rather than spectacular and certainly not at the levels seen at the height of the housing market.”

E.surv director Richard Sexton says: “Banks have widened the goalposts for borrowers. They have introduced record-low rates and a wider range of mortgages. Lenders have grown in confidence, so they are more willing to lend to high LTV borrowers.

“This has sparked a burst of activity, especially among first-time buyers. And falling inflation will make it easier for prospective buyers to construct a deposit for a mortgage. This should help keep the mortgage market firmly on the road to recovery.”

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