Gross mortgage lending up 15% in June
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Gross mortgage lending in June was an estimated £13.1bn, a 15% increase from £11.4bn in May and a 7% increase from £12.2bn in June last year, according to new data from the Council of Mortgage Lenders.
Gross lending in the second quarter of 2010 was an estimated £35bn, up 17% from the first quarter of this year and up 7% from the second quarter of 2009 when it was £32.7bn.
Lending in the first half of 2010 remained unchanged from the first half of 2009 - £65bn.
Paul Samter, economist at the CML, says: “Our gross lending estimate of £13.1bn 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.”
Jonathan Samuels, CEO at Drawbridge Finance, says mortgage lending may be up slightly, primarily due to seasonal factors, but in the short-term both the mortgage and property markets remain delicately poised.
He says: “Ever-increasing supply and falling demand, driven largely by difficulties securing mortgage finance, could place downward pressure on prices in the months ahead. There is a considerable financing shortfall that is unlikely to be made up for some time yet.
“People who can secure mortgage finance will be calling all the shots. At one point, in late 2009, the balance of power started to swing back towards sellers but now they are very much on the back foot.
“The direction of prices could depend on why people are selling. Are they selling in order to beat further price falls, or are they selling because they have to?
“Properties at the higher end of the market, especially those in sought-after areas, are likely to be far more resilient, as mortgage finance is generally required at lower LTVs.”
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