What recession? Mortgage lending up by a fifth

Despite the fact that we’re all on the skids, queuing at food banks and living in rented hovels, there’s been a surprise rise in mortgage lending, according to the Council of Mortgage Lenders. In May it hit the highest level since October 2008 - £14.7bn - leaving even lenders wondering WTF is going on.


Some say the rise in lending just be a freak incident, but others think that there’s a definite recovery going on in the housing market, thanks to government schemes like Funding for Lending, which offers funds to banks on the condition they lend them to out to people looking to buy homes or start businesses.

The housing market has also benefitted from the Help To Buy scheme, another government idea, which allows buyers to borrow money from the government and get a mortgage with just a 5% deposit.

Mortgage broker Mark Harris reckons it's onwards and upwards: ‘Recovery in the housing market is well underway. This comes as no surprise: finally, the pick-up in business that estate agents and mortgage brokers have been reporting since the start of the year is filtering through to the official figures.'

So does this mean that we can all get a mortgage, put up a ‘Dunroamin’ sign, stick a gnome in the garden and put our feet up for a bit?

Or could it simply be the start of a new government-sponsored housing bubble that’s going to pop and leave us covered in negative equity and despair?


  • Mike
    Am currently going through with a house purchase and let me tell you the mortgage side has gone a lot tougher. Gone are the days of 2.5 times joint or 3 times individual salary assessments. And welcome to financial affordability checks. These will become mandatory from 2014 but some banks like the Skipton are implementing this now. You basically hand over 3 months of yours and any other joint borrowers current bank statements. It is then upto the underwriter of said lending firm to assess your ability to repay based on statements provided. This also negates any mortgage agreed in principle. You now have to hold out for a mortgage offer. I agree this should have been done years ago and maybe would have helped to avoid our current situation. But it comes as quite a surprise.
  • Pizza_D_Action
    Whilst I agree that financial affordability checks are a good idea for most people, it pisses me off that my standard mortgage payment is £600 a month, I actually pay £1200 a month off it, yet if I go and ask for a mortgage for £800 a month then some idiot in the bank will then want to know how I spend every penny before some shitty computer programme gives its verdict on whether I can afford something that I already know I can.
  • Steven S.
    I think it’s not a bad scheme if you think of it. It’s a give and take process. They get more borrowers because it is cheaper and could gain more profit out of it while improving the welfare of the country.

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