The Council of Mortgage Lenders has reported that gross mortgage lending fell sharply in September. The CML estimates gross mortgage lending in September was 10% lower than August 2012 and 15% lower than September 2011. They are citing one of the reasons for September’s weak figures as being a relative lack of housing transactions. However, there are some positives. The Bank of England, whilst confirming the CML’s figures, has expressed hopes that funding for lending will make its mark by the end of the year. Interestingly, Tesco have just launched Britain’s cheapest mortgage; being a 2 year fixed deal available at 1.99%. Tesco have advised the deal was possible because of the funding for lending scheme. Unfortunately this deal is not aimed at first time buyers with a 60% loan to value, however it is still a step in the right direction and it will be interesting to see if Tesco’s news today will be followed by other lenders being able to launch similar products.
I still urge both Scottish and UK Governments to do more to help first time buyers as that is the critical element that the housing market in particular and the economy in general is missing.Lindsay Darroch Partner & Head of Property