“With today’s monthly and quarterly CML lending figures the best we have seen in almost five years, the mortgage market is certainly gaining traction. But exactly where the market is heading is still far from clear.
“Despite the rise in swap rates, the BoE report suggests consumer demand has been enough for lenders to keep mortgage rates row in an effort to beat the competition. Credit is becoming more easily attainable for buyers with deposits of all sizes, but despite this the first time buyer market is yet to fully emerge from the shadows. This is one of many reasons why the pressure is on the government to get the details of its upcoming Help To Buy mortgage guarantee offer right.
“Excluding specialist lenders from the Funding for Lending Scheme (FLS) has already skewed the competitive landscape. If the new guarantee is burdened with excessive criteria and fails to offer capital relief as an incentive for lenders, it runs the risk of becoming a white elephant whose upkeep is more costly than its usefulness to support the market.”