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Gross mortgage lending up 15% in June

CML economist Paul Samter said:

“Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity.

“There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained.

“The FSA has outlined a clear direction of travel as part of its mortgage market review. The consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit.”

Nigel Lewis, property analyst from FindaProperty.com said:

“New properties have flooded the market in recent months. This has put pressure on house prices and we’ve seen slowing – and in some places declining – price growth as a result. The 15% rise in lending is uncharacteristic of the traditionally quiet summer months and may help to alleviate the pressure from increasing stock levels. However, the number of loans is still relatively low compared to peak and unless we see a decline in stock levels, prices are unlikely to rise much further this year.

“It’s unlikely that the base interest rate will be increased before the end of the year so potential house buyers with a bit of equity behind them will still be able to benefit from attractive mortgage deals. But lack of confidence and the threat of further economic woe means demand won’t increase dramatically in the medium term.” 

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