CML reports further rise in mortgage lending for June

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by Kay Murchie

The Council of Mortgage Lenders (CML) have today announced a surge in mortgage lending for the month of June.

Lending reached £12.3 billion for the month, up from £10.5 billion the previous month, according to the CML.

However, the organisation points out that the June rise is attributed to a seasonal increase and the gross lending figure is still 48% lower when compared with June last year.

Since the onset of the credit crunch in the autumn of 2007, mortgage lending overall has slumped significantly.

CML economist, Paul Samter, comments: “The pick-up in June’s lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer.”

The CML’s latest figures show that gross mortgage lending stood at an estimated £33.3 billion for the second quarter of 2009 - the lowest quarterly reading since early 2001.

The CML is sticking with its forecast of gross mortgage lending of £145 billion this year.

David Smith, senior partner at Carter Jonas property consultants, comments: “There are more prospective buyers out there now than there have been for some months, despite the tough economic conditions and still fragile consumer confidence. But ongoing mortgage constraints mean many prospective buyers will remain just that.”

Earlier this month, housebuilders Bovis, Redrow, Barratt and Persimmon highlighted that the lack of mortgage finance continues to hinder a recovery in the housing market.

Meanwhile, recent research from moneysupermarket.com revealed that first-time buyers need on average a deposit of £32,000 in order to secure a mortgage.

In related news today, property website Rightmove, has reported that asking prices rose in July - this represents the fifth monthly rise this year.