Mortgage lending rises in July
Thursday, 20 August 2009 2:24 PM
Mortgage lending rose 26 per cent in July compared with June according to the latest figures released by the Council of Mortgage Lenders (CML).
Gross mortgage lending totalled an estimated £16 billion in July, 26 per cent higher than the £12.7 billion lent by mortgage providers in June but still down 36 per cent from £24.9 billion in July 2008.
The CML said the latest figures were "further evidence of a modest improvement in the housing market over the summer after an exceptionally weak winter".
But mortgage lending is still down on any historic comparison; this is the lowest July lending figure since 2001 and £11 billion lower than the July average over the previous seven years of £27 billion. The CML added lending volumes remained consistent with its forecast for £145 billion in gross mortgage lending this year.
The trade body predicted the rise in mortgage lending reflected the seasonal trend over the summer months as a whole. June and July are, typically, strong months in terms of mortgage lending because of increased activity among potential homebuyers.
CML economist Paul Samter said: "Most of the indices point to house prices rising modestly over the summer months. The CML's July gross lending estimate of £16 billion is the highest level in nine months and consistent with the rise in house purchase approvals.
"But the bounce-back in activity from the extreme weakness around the turn of the year, coinciding with a seasonal bounce, is limited in how far it can go against the current back-drop. We expect improved sentiment to support the market, but a further significant pick-up is unlikely with so many obstacles in place. As a result, we anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge."
