Cautiously Optimistic Report from Council of Mortgage Lenders

It was interesting to read the report from the CML advising that mortgage lending rose by 4% last month and by 21% on April last year.  I would however  offer a slight note of caution when comparing year on year as there was a big drop off in April 2012 due to the end of the Stamp Duty holiday on the 31 March 2012.  However, there is no getting away from the underlying trend that April is one of the strongest months for lending activity since 2008.

The cautiously optimistic view certainly chimes with my opinion and I think that 2013 should show a slow but steady improvement.  The only caveats to that are the usual ones in relation to an unexpected development in Europe or another economic crisis – I am concerned regarding the surge in the FTSE and other Stock Markets around the world which is being fuelled by cheap money rather than reflecting improving economic conditions.  What happens when the life support system of quantitative easing is turned off? – I will cover this in a future blog.

There have also been some interesting announcements from the Scottish Government in relation to their support for the housing market, both through rent to buy and a mortgage guarantee scheme – I am delighted that both UK and Scottish Governments have woken up to the importance of the housing market to the economy as a whole. As mentioned in previous blogs, my hope is that these schemes will stabilise the housing market and encourage banks to start funding residential developments.

Lindsay Darroch
Partner & Head of Property

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