CML reports ten per cent rise in mortgage lending

Mortgage lending increased in the UK by six per cent in August, compared to July, according to the Council of Mortgage Lenders (CML).

The lending organisation cited seasonal factors as the key to the rise in mortgage lending. The increase in August offset the lower than expected figure reported for July.

However, the CML said that the fluctuations in the lending figures reflected seasonal variations and that overall lending was broadly flat.

CML chief economist Bob Pannell said: "Much of the recent variation in monthly lending figures appears to have reflected seasonal factors, with the underlying picture being one of activity levels that continue to be subdued but broadly stable.

"The August performance more or less offset the weaker than expected July figure. Taking July and August together, lending has shown little change on the same months of 2009 and 2010."

Overall, gross mortgage lending reached £13.4 billion in August, a rise of ten per cent on August 2010 and the highest monthly total since July 2009.

Gross mortgage lending stood at £13.4bn in August, a 10% increase compared with the same month a year ago, the Council of Mortgage Lenders (CML) said.

Brian Murphy, head of lending at the Mortgage Advice Bureau, commented:

"The month on month rise is an apparently healthy 6%, and there was 10% more lending than in August last year.

"But to call this a bounce would be flattering to say the least. Following the subdued July figures, there is little to be proud of in this increase.

"More mortgages are being taken out for the simple reason that rates have become far more attractive in recent months and lower house prices are stimulating people to buy.”

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