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Gross mortgage lending up 7% in May

CML economist Paul Samter commented:

“The ground has been cleared for next week’s Budget to be the start of an austerity drive to get the public finances onto a more sustainable footing. We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy – particularly on household finances and confidence.

“Financial sector regulation is a further source of uncertainty. The Chancellor has announced that the Bank of England is to take on regulatory responsibility for the banking system. As well as regulating individual firms, the Bank will have "macro prudential" powers and be accountable for the stability of the system as a whole. But it is not yet clear what levers it will have at its disposal to do so.”

Stuart Law, of Assetz said:
"As expected, the latest figures from the CML show that gross mortgage lending increased again in May, following a pre-election dip in April, suggesting that consumer confidence has increased now that the Lib-Con government is in place. 

"The latest data from the Assetz House Price Watch, an amalgamation of the five major UK indices – CLG, Nationwide, Halifax, Acadametrics and Rightmove, shows that average house prices are now less than 7% below the peak recorded in 2007 and they have climbed by over 3% for the year to date, rubbishing fears of an imminent second dip in the housing market.

“All signs suggest that the property market continues to prosper and we are now in the throes of a consistent housing market recovery, despite the potential tax increases which are likely to be announced in the budget next week.”

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