Mortgage lending sees slight glimmer

Gross mortgage lending in the UK economy showed signs of a slight recovery during July, according to the latest figures from the Council of Mortgage Lenders (CML).

The total lent during the month stood at an estimated £24.8 billion in July. This was up five per cent from the figure recorded for June.

However, despite the month-on-month recovery, the July figure is still 27 per cent below that recorded by the CML a year ago.

Commenting on the findings Bob Pannell, CML head of research, said: "While there was a small month-on-month increase in activity, it represented a notable decline from a year ago.

"This continues the weaker picture seen in June and points towards the more subdued levels of lending we are likely to see in the second half of 2008."

CML members are banks, building societies and other lenders who together undertake around 98 per cent of all residential mortgage lending in the UK.

There are presently some 11.74 million mortgages in the UK, with loans worth over £1.2 trillion.


Daniel Lee, chief executive of property search engine Globrix, said: "The past couple of months have been crucial for the housing market. While property transaction and mortgage lending levels remain very low, the availability and competitiveness of mortgage products has increased slightly and sellers are now starting to understand that they have to accept a lower price if they want to move on.

"Slowly but surely the two key factors that can drive a revival in the property market are converging — improved mortgage choice and more realistic asking prices."

Research out today from Datamonitor points to the dearth of mortgage lending to continue until 2010.