June 2010 Records Mortgage Lending Rise
Mortgage lending rose in June by 15 per cent, the Council of Mortgage Lenders (CML) has revealed, though the majority of loans were to existing home owners.
Figures showed that the amount lent in June rose to £13.1 billion from £11.4 billion in the previous month. It was also revealed that gross lending in June had increased compared with June 2009, rising by 7 per cent from £12.2 billion.
Lending in the second quarter of 2010 rose to around £35 billion from £30 billion in the first quarter, around a 17 per cent increase. Despite this, lending in the first six months of this year matched that of 2009.
Paul Samter, an economist for CML, told Guardian.co.uk that while these figures were encouraging, they still reflected a relatively low level of activity and could be attributed to a seasonal pick up.
He added: "There are signs of house prices stabilising and more properties coming on to the market following the abolition of home information packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained."
Mr Samter also claimed that a consultation paper on responsible lending would make it harder for borrowers to secure mortgages, plus job cuts in the public sector would also have a negative impact on the property market.
On the plus side, many buy-to-let owners will have decided to hold onto properties after the rise in capital gains tax was set at 28 per cent rather than the expected 40 per cent. This should mean that house prices will not be depressed by an influx of properties entering the market.
Mortgages news posted by Garry on 21 July 2010
