Mortgage lending up in July - CML
Monday, 12 September 2011 01:12
Mortgage lending rose by both volume and value in July compared with the previous month, new figures have revealed.
According to the Council of Mortgage Lenders (CML), value increased from £6.9 billion to £7.3 billion, while the volume rose from 47,800 to 48,800, the report added.
Both figures were at their highest level since last August, although they were lower than July 2010.
Meanwhile, remortgaging rose both on a monthly basis and compared with the same period last.
There were 31,500 remortgages worth £4 billion in July, up from 31,300 in June that were worth £3.8 billion.
Lending to first-time buyers hit its highest level for a year, with the value rising to £2.3 billion from £2.2 billion in June.
However, there were fewer loans to first-time buyers by number, as 18,200 first-time buyer mortgages were granted, down from 18,500 in June.
CML director general Paul Smee said the figures showed the housing market is "holding steady", but suggested a surge in lending looks unlikely.
"However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages," he added.
Chief UK economist at IHS Global Insight Dr Howard Archer said the current state of the housing sector may mean the Bank of England keeps the base rate at 0.5 per cent until at least 2013.
He continued: "It is possible that a lack of properties for sale could limit the downside for house prices going forward, but currently there is little evidence of a significant shortage."
Mortgage Advice Bureau head of lending Brian Murphy agreed, saying: "This is less of a vote of confidence in the economy than a recognition that its continued weakness will force the Bank of England to keep interest rates at rock bottom."
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