Mortgage Lending at Lowest Levels Since Rates Began to Climb

The mortgage market is currently being driven by those looking to remortgage, but there’s unlikely to be a resurgence in activity until rates start to fall. This is according to Octane Capital chief executive Jonathan Samuels, who points out that gross lending has sunk to its lowest since interest rates increased, driven by a reduction in house purchase lending.

Mortgage rates continue to affect the market

The latest market analysis by Octane Capital has looked at gross mortgage lending by sector and how this figure has changed both quarterly and over the last year. The analysis of gross mortgage lending figures from the Building Society Association shows that total mortgage lending sat at just £50.5bn during the first quarter of 2024, the lowest level seen since interest rates started to climb in December 2013.

As a result, total mortgage lending was down -5.4% versus Q4 2023 and sat -13.1% below the total seen in Q1 2023. Gross lending for house purchases fell by -11.1% between Q4 2023 and Q1 2024, totalling £29.7bn, as homebuyers continue to struggle with the far highest cost of borrowing in today’s market, despite a hold on interest rates at 5.25%.

However, further dissection of the data by Octane Capital shows that there are signs of positivity starting to emerge and these are being largely driven by those looking to remortgage. Gross lending with respect to remortgaging actually increased by 3.5% in Q1 2024, with ‘other’ gross lending also seeing growth of 9.7%.

This suggests that the stability that has come via a hold on interest rates has, at least, helped to boost mortgage market sentiment amongst those who already have a mortgage in place.

Stability is key within the mortgage sector and such a sustained period of interest rate hikes was always going to dampen total gross lending. - Jonathan Samuels, Octane Capital chief executive

He added: “The good news is that this decision could come within the next few months and, when it does, it will bring a much-needed boost to mortgage market sentiment.”

In the meantime, it’s those who already have a mortgage in place who are driving market activity, with the more stable landscape allowing them to better assess their options and remortgage with greater confidence.

Just Mortgages Promotes Gareth Lowndes

Just Mortgages has promoted Gareth Lowndes to sales director for client services. Lowndes’ new role will see him develop the client services booking team and engage with advisers across the company, monitoring business sales targets and driving both revenue and protection sales growth.

Gareth Lowndes, Just Mortgages sales director for client services

He will also help recruit, develop and retain advisers alongside ensuring regulatory responsibilities and best practices are adhered to. Based in South Wales, Lowndes joined the Just Mortgages team in 2011 working in various roles including mortgage and protection adviser, to divisional sales director and on to financial services director.

I am very excited to be taking on this new role and to be part of the year on year growth in Just Mortgages. - Gareth Lowndes, Just Mortgages sales director for client services

Just Mortgages and Spicerhaart chief executive officer John Phillips adds: “With his skills, knowledge and experience, Gareth is the right man for the job to ensure we are maximising every opportunity, finding the right talent and always delivering that five-star service.”

Atom Bank Boosts New Mortgage Lending

Atom bank lifted annual mortgage completions 20% to £1.6bn as it introduced an app home loan retention feature and trimmed offer times. The digital bank’s loan book lifted 33% to £3.1bn in the year to the end of March.

Atom bank sees growth in mortgage lending

The firm points out that a new in-app mortgage retention process for existing customers saw retentions jump 350%, while the median speed for offer times fell by 24 hours to five days, over the last 12 months.

There’s plenty more scope for growth and improvement in the year ahead both in terms of originations and retentions. - Mark Mullen, Atom bank chief executive

The bank’s portfolio ‘predominantly’ consists of owner-occupied loans, but also includes £612m of buy-to-let lending to professional landlords, up from £212m over the period.

The business swung to a pre-tax profit of £6.7m, from a £10.1m loss a year ago.

This has been our best year yet at Atom bank. We have achieved profitability across all measures, grown our loan book significantly, maintained robust credit quality, avoided fraud losses altogether, kept our costs tightly controlled and enhanced our already industry-leading customer experience metrics. - Mark Mullen, Atom bank chief executive