The Council of Mortgage Lenders (CML) says mortgage lending in the United Kingdom has reached its highest in seven years.
BBC has reported that according to the CML, borrowings among homebuyers in 2015 totaled to £220.3 billion, which is up 8 percent from the previous year. The total mortgage lending last year is also the highest since 2008 where homeowners borrowed £247.8 billion.
The fast recovery in this aspect of the market is attributed to growing wages, decreasing unemployment and cheap mortgage deals, among others.
Meanwhile, the CML said that this year, there is an uncertainty in the outlook while the sector is yet to see the impact of stamp duty beginning April on buy-to-let landlords. In 2017, a tax relief reduction is also set to be implemented.
"The supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity," CML economist Mohammad Jamei said.
Elsewhere in the U.K. real estate market, JPMorgan Chase & Co. said that the U.K. mortgage bonds is set to be unavailable for foreign investors soon. According to Bloomberg report, "That's because Britain's biggest banks, which use securitization vehicles to transform their pound-denominated mortgage loans into securities priced in dollars or euros, are being replaced by issuers that can't issue in those currencies as easily." The securitization vehicles are better known as master trust.
More expensive securitized loans and cheaper funding from central banks led lenders to reduce sales of the debt. As a result, smaller banks are now dominating the residential mortgage-backed securities market, Bloomberg further said.
Gareth Davies, head of European asset-backed securities research at JPMorgan in London, said, "If you're a credit investor in Munich, Paris or Boston, the chances are you don't have the capacity or desire to buy sterling bonds, so you will naturally be excluded from U.K. RMBS deals that don't offer euro or dollar securities."
