Those hoping for a clearer indication of exactly what is happening in the housing market at the moment are to be disappointed. The latest figures on mortgage lending have just alluded to a ‘statistical fog’ according to the Council of Mortgage Lenders (CML).
The total amount of new loans in May amounted to £16.5 billion- exactly the same amount as the month before. However, the figure is 12% higher than it was in May 2013. It is believed that whilst the number of mortgages taken out has been falling over the past few months, the general trend has been for a rise in the value of loans.
New lending rules which are known as the Mortgage Market Review came in at the end of the April, potentially creating a stoppage in applications. The market indicators point to a slow down in activity levels, but insiders are unsure as to how long it could go on for. The new rules are likely to have disrupted the ‘normal patterns of activity’ creating statistical fog. As the rules lift over the forthcoming months, a clearer picture rather than the aforementioned ‘statistical fog’ should remain.
Earlier in June, the Royal Institution of Chartered Surveyors reduced its expectations for house price growth and some industry experts are saying that the latest figures from the Council for Mortgage Lenders support that. One said that the data produced for May corroborates the evidence that the housing market has temporarily lost momentum in recent months. It is also believed that the threat of increasing interest rates in the months to come may be worrying potential borrowers.
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