Mortgage lending picks up
Mortgage lending increased by a quarter in July as the housing market continues to show green shoots of recovery, according to figures from the Council of Mortgage Lenders (CML).
Gross mortgage lending, which includes both lending for house purchase and remortgage, totalled an estimated £16 billion in July, up 26% from £12.7 billion in June.
Last month's figures are the highest levels of lending seen for the last nine months but are still down 36% from £24.9 billion a year earlier.
The CML said lending in June and July had picked up as it had expected due to more people typically buying houses or remortgaging over the summer months.
The lending association warned that although the figures show a "modest improvement" in the housing market, July's figures remain substantially lower on any historic comparison.
It says this is the lowest July lending figure since 2001 and £11 billion lower than the July average of £27 billion over the previous seven years.
With banks still unwilling to lend and a lack of competitive mortgage rates, the CML cautioned against expectations of further improvement in the coming months.
Paul Samter, economist at the CML, says: "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."
The CML believes lending volumes are still likely to reach its forecast of £145 billion in gross mortgage lending this year.
Nicholas Leeming, director of propertyfinder.com, says: "The fact the CML has maintained its full year lending target shows lenders are still no closer to actually unlocking the vast sums of government and Bank of England cash they are awash with.
"Lenders fear future price falls, but perversely it is their own unwillingness to provide finance which could undermine the recovery in the housing market and the wider economy."
Changing mortgages without moving home. Property owners chiefly remortgage to get a better deal but some do so to release equity in their homes or to finance home improvements, the costs of which are added to the new mortgage. Even though you’re not moving house, you still need to engage solicitors, conveyancing and the new lender will require the property to be surveyed and valued.