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20 July 2010

CML: Mortgage lending recovers in June

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by Kay Mitchell

CML: Mortgage lending recovers in June

The Council of Mortgage Lenders (CML) has today revealed a rise in mortgage lending for the month of June – recovering to a six-month high.

According to the CML, gross mortgage lending rose by 15% during the month to £13.1 billion – the highest since December 2009.

The figure was also 7% higher than June 2009 but the CML cautioned that the increase was a seasonal pick-up and the outlook remains subdued.

The CML recently said new lending in 2010 is way below pre-recession levels and mortgage lending is expected to remain subdued due to ongoing economic uncertainty.

CML’s economist Paul Samter comments: “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,” he added.

The figures come just a week after the Royal Institution of Chartered Surveyors (Rics) said property prices will not continue their upward trend.

The decision by the coalition Government to scrap Home Information Packs (Hips) has resulted in a surge of properties being put up for sale.

However, this has resulted in a high level of stock but a shortage of buyers will ultimately drive down house prices, according to Rics.

Brian Murphy of mortgage brokers the Mortgage Advice Bureau, concludes: “With looming public sector cuts, taxation rises, a freeze on wage increases and inflationary pressures, we are likely to see lending tail off during the second half of 2010, with buyers likely to take a wait-and-see approach.”

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