Mortgage lending picks up in June
- 20 July 2010
- From the section Business
Mortgage lending picked up in June, according to the Council of Mortgage Lenders (CML).
Gross lending, which includes lending to people remortgaging as well as house buyers, rose by 15% in June to £13.1bn.
This was 7% higher than a year ago and also the biggest monthly figure so far this year.
However, the CML said June's increase was just a seasonal pick-up and that lending remained subdued.
"There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs" said the CML's economist CML Paul Samter.
"This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained," he added.
The subdued outlook for the property market was underlined by comments from the Bank of England, in the latest edition of its monthly publication Trends in Lending.
"The major UK lenders expected demand for secured lending to be flat over the rest of the year, partly reflecting weak confidence among potential homebuyers," it said.
"Data from the major UK lenders indicated that their mortgage approvals for house purchase decreased slightly in June," the Bank added.
The Bank warned that the supply of mortgage funds for the public might fall in the next three months.
It said lenders feared they may not be able to raise as much money as they need by borrowing from each other in the wholesale financial markets.
Both of the main monthly house price surveys, from the Halifax and the Nationwide, show that prices have been levelling off in recent months, after rising briskly since the spring of 2009.
And the Royal Institution of Chartered Surveyors (Rics) predicted last week that house prices in the UK might start to fall as the number of sellers start to outweigh the number of buyers.
Brian Murphy of mortgage brokers the Mortgage Advice Bureau, said overall mortgage lending might fall this year.
"With looming public sector cuts, taxation rises, a freeze on wage increases and inflationary pressures, we are likely to see lending tail off during the second half of 2010, with buyers likely to take a wait-and-see approach," he said.