Mortgage lenders see increased business
Friday, 21 Aug 2009, 4:39pm
Mortgage lending figures were up by 26 per cent in July, compared to levels seen in the previous month, new research has shown.
Gross mortgage lending in July was 26 per cent up on figures for the previous month, with an estimated £16 billion being taken out to finance the purchase of a new home or remortgage an existing property.
This is compared to £12.7 billion in June, but also represents a drop of 36 per cent year-on-year, with July 2008 seeing £24.9 billion worth of money being provided by mortgage lenders to homeowners.
CML believes that the hike in lending is more to do with new home purchases than remortgaging activity, as the summer months typically see a greater number of people looking for a new house.
Paul Samter, economist for the CML, said: "Most of the indices point to house prices rising modestly over the summer months. The CML's July gross lending estimate of £16 billion is the highest level in nine months and consistent with the rise in house purchase approvals.
"But the bounce-back in activity from the extreme weakness around the turn of the year, coinciding with a seasonal bounce, is limited in how far it can go against the current back-drop. We expect improved sentiment to support the market, but a further significant pick-up is unlikely with so many obstacles in place," he added.
The Bank of England recently released new figures for the number of mortgage approvals made in June, which suggest a pick-up in the housing market.
Mortgage approvals rose for the fifth month in a row, from 44,169 in May to 47,584 in June, and this figure is the highest since April 2008.
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