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Mortgage lending dip continues, says CML | Mortgage lending dip continues, says CML |
(35 minutes later) | |
UK mortgage lending in November returned to the level seen a year earlier, lenders say, offering more evidence of a post-summer slowdown. | UK mortgage lending in November returned to the level seen a year earlier, lenders say, offering more evidence of a post-summer slowdown. |
Gross lending totalled £16.9bn in November, down 9% from October, the Council of Mortgage Lenders (CML) said. | Gross lending totalled £16.9bn in November, down 9% from October, the Council of Mortgage Lenders (CML) said. |
The trade body said that stamp duty reforms announced in the Budget would increase activity temporarily. | The trade body said that stamp duty reforms announced in the Budget would increase activity temporarily. |
But it has predicted that lending in the next two years will rise at a slower rate than in 2014. | But it has predicted that lending in the next two years will rise at a slower rate than in 2014. |
It added that a "gentle trajectory" for the mortgage market would "calm" any concerns over the effect of a housing boom on the UK economy in general. | It added that a "gentle trajectory" for the mortgage market would "calm" any concerns over the effect of a housing boom on the UK economy in general. |
There are 11.1 million outstanding mortgages in the UK, worth £1.3 trillion. | There are 11.1 million outstanding mortgages in the UK, worth £1.3 trillion. |
In the Budget, Chancellor George Osborne said that stamp duty was an "outdated, badly designed" system | |
The system that ended on 3 December saw buyers charged stamp duty in the UK as a percentage of the whole of the property price. | |
Now, the new rates of stamp duty only apply to the amount of the purchase price that falls within the particular duty band, making it more like income tax. | |
The system will operate across the UK until April, after which Scotland will break off to use its own system. | |
"The reform in stamp duty is likely to provide a modest short-term boost in activity over the next few months, but its impact will fade away in the medium term," said Mohammad Jamei, CML economist. | |
The CML said that it expected the number of homes being sold in 2015 and 2016 to slow slightly to 1.18 million in each year. | |
It predicts gross lending will increase at a slower rate than it did in 2014, reaching £222bn in 2015 and £240bn in 2016. | |
Any danger of a boom would be restricted by affordability, it said. |
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