Market Report on Mortgage Lending in the UK - 2020

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Report on Mortgage Lending in the UK
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Summary
- The Buy-to-Let sector recorded substantial
growth in 2015, as investors increasingly looked
towards property in the absence of any favorable
savings rates. With house prices continuing to
rise and the buy-to-let making becoming a
landlord more affordable this type of mortgage
has risen from being a twentieth of all mortgages
to a fifth in a single year. The availability of
high loan-to-value (LTV) mortgages and even
interest-only mortgages, combined with pension
reforms in the March 2015 Budget - allowing over
55s to receive a lump sum instead of annuities -
sparked the growth. - Mortgage affordability
eased during the recession as the Bank of England
reduced its policy interest rate to a record-low
of 0.5 in 2009, and Funding for Lending provided
18 months of access to cheap bank finance. This
prompted retail lenders to lower interest rates
on tracker and fixed-rate mortgages during the
review period (20092014), leading to lower-value
loan repayments from 2009 onwards.
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- This trend continued in 2015, as HSBC became
the first lender to launch a sub-2 five-year
fixed mortgage in April, which triggered price
war between lenders. Rates continued to plunge in
2015, with the average 75 two-year LTV mortgages
as cheap as 1.6. This has been a substantial
factor behind driving the gross lending and the
repayments markets, as consumers have been keen
to lock themselves into the attractive rates. -
A surge in mortgage lending was recorded during
the second half of 2015, as customers took
advantage of low interest rates, with the
Governor of the Bank of England, Mark Carney,
suggesting in November 2015 that the central bank
rate may not rise until 2017. Total gross lending
increased by 29.4 in 2015. - Although it looks
as if the central bank rate will not rise until
as late as 2017, the rate will increase at some
point over the forecast period (2015-2019), which
will increase repayment costs.
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- With the demand for mortgages being so high,
any interest rate hike is unlikely to lead to a
decline in gross mortgage lending, although
repayments are more likely to drop off as
customers begin to struggle to make them. -
Lending to first-time buyers had declined
year-on-year to April 2015 following the
implementation of the MMR in April 2014. The
review includes measures to check that all
borrowers can afford the cost of any potential
hike, to the extent of looking through online
bank statements and credit ratings, have made it
harder for many to get on the property ladder. -
The boom in buy-to-let lending has created a very
saturated market with direct competition for
first-time buyers, and it has certainly
contributed to rising house prices, especially in
London. Lending to first time buyers increased by
10 year-on-year to September 2015, as real wages
continues to improve and demand remained strong.
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Scope - This report provides market analysis,
information and insights into the UK mortgage
industry - It provides a breakdown of the types
of mortgages offered in the UK - It analyses
drivers and the outlook for the market - It
provides information on the main banks in the UK
market - It covers news and regulatory
developments - It forecasts the future of the
mortgage industry in the UK over the next five
years
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Reasons To Buy - Gain an understanding of the UK
mortgage industry. - See monthly and annual
statistics on every aspect of the market, both in
written form and in graphs and tables. - Read
analysis of the relevant market statistics,
telling you what has been happening in the
mortgage market, why it has been happening and
what we expect to happen over the coming
years. - Read about all the economic factors
impacting the industry. - Read about how
individual banks and building societies are
affecting the market, in terms of market share
and innovation.
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Key Highlights - Gross mortgage lending totaled
GBP204.5 billion in 2014, representing a 15.0
increase over 2013. - This was the
second-fastest annual growth rate recorded during
the review period, after slowing from 22.3 the
previous year.
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Table of Contents
1 Executive Summary 2 Introduction 3 Market
Analysis 4 Market Outlook 5 Economic Backdrop 6
Competitive Landscape 7 Regulation and Policy
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To view the full Executive Summary and Table
of Contents, please visit Report on Mortgage
Lending in the UK Contact Us- Phone
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