Mortgage lending has sluggish start to 2015, says CML

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Mortgage lending suffered a "sluggish start" to the year but lending has picked up in recent weeks, according to a trade body.

Gross mortgage lending for the first quarter of this year was down 12% from the previous three months at £44.9bn, the Council of Mortgage Lenders (CML) said.

This marked a 3% decrease on the same period in 2014.

But the CML said that lending in March was much higher than February.

Total lending through home loans reached £16.5bn in March, some 21% higher than February and 7% higher than March last year.

"The underlying lending picture is stabilising," said Bob Pannell, chief economist of the CML.

"Sentiment and activity are showing early signs of improvement, and should be further supported by the effects of stamp duty reform. We expect to see lending strengthen over the next few months, albeit from a relatively sluggish start in 2015."

Lenders have been cutting their mortgage rates in recent weeks, with little prospect of the Bank of England's base rate rising during the rest of the year.

The National Association of Estate Agents (NAEA) said that stricter affordability checks were slowing down the process of home buying.

The changes, which came into force a year ago, require lenders to study mortgage applicants' incomings and outgoings, and test whether buyers can cover repayments if interest rates were to rise.

"A drop in the number of buyers is the direct result of a slow-down in acceptance of mortgages, with it now taking an average of 50 days to receive a mortgage offer," said Mark Hayward, managing director of the NAEA.

"This increases the risk that sales won't go through and puts unnecessary pressure on any chain transactions."

There are an estimated 11.1 million residential mortgages in the UK, with loans worth over £1.3 trillion