Record-low borrowing levels should increase demand for property across Britain during the coming months, according to a number of various property experts.
This comes despite a recent fall in the number of mortgage approvals for property purchases. Gross mortgage lending fell by £18.4bn in April, down 11% from March, according to the most recent data from the Council of Mortgage Lenders (CML).
Encouragement
Despite this fall in lending figures, a number of housing market analysts predict that low mortgage rates will lead more people to borrow money in order to invest in property.
Jeff Knight, marketing director at Foundation Home Loans, said: ‘Although we’ve seen a slight dip in mortgage lending levels, the housing market seems to be enjoying a return in buyer confidence.’
‘First-time buyers and remortgaging activity continued to drive lending volumes throughout April, as low interest rates have, and will continue to, support demand.’[1]
Record-low interest rates to drive property demand
John Eastgate at OneSavings Bank said that he wasn’t surprised to see a fall in lending levels following the recent rise in inflation. However, he also expects to see conditions in the market improve.
‘This [the fall in mortgage activity in April] is likely to be only temporary and I don’t see any long term trend being established by these figures,” he said. “Inflationary pressures will pass and low rates will continue, and the mortgage market will remain robust,’ he noted. [1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/5/low-interest-rates-will-continue-to-support-demand-for-property
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