The CML which represents mortgage lenders has estimated that mortgage lending in June increased by 15% compared with May 2010 to £13.1Bn. In comparison to June 2009 the figure was 7% higher.
However the press release from the CML warned against any tightening of monetary policy and concerns for lending in the future.
CML economist Paul Samter commented:
“Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity.
“There are signs of house prices stabilising and more properties coming onto 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.
“The FSA has outlined a clear direction of travel as part of its mortgage market review. The consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit.”
David Newnes, Estate Agency Managing Director of LSL, owner of national chains Your Move and Reeds Rains, comments on today’s CML gross lending figures:
“It’s encouraging news that gross lending improved in June. But it’s a symptom of slightly increased activity in the housing market rather than confirmation that lenders are making it easier to get a mortgage. Housing transactions picked-up by one fifth compared to May, and June’s lending figures reflect this surge in activity. We are still some way from being able to declare an improvement in the lending market. The level of lending in the second quarter of 2010 was just half the level we saw two years ago. The wider economic conditions are still challenging, and the impact of the recent austerity measures may well dampen mortgage lending in the short-term.
“There is currently a shortfall between the number of people who want a mortgage, and those who can afford the deposits lenders require. Monthly interest rates are attractive, but thousands of potential buyers — especially first-timers — cannot take advantage of this. The long-term, sustainable recovery of the housing market is dependent on lenders offering wannabe first-time buyers more attractive – and achievable – mortgage products.”