Mortgage Lending Up 3rd Month in a Row

Mortgage lending again rose for the 3rd consecutive month in July; its highest level for a year, figures showed today.

£13.6 billion was lent during July, some 5 per cent more than June and the highest since July 2009, according to the Council of Mortgage Lenders.

This figure was still a 4% reduction on the £14 billion that was lent during the same month last year and the CML warned that levels were likely to remain subdued for the rest of 2010.

The group had also, last week, reduced its forecasts for total mortgage lending for 2010, droppping the figure from £150 billion to £140 billion, putting it slightly below last years level.
 

CML economist, Paul Samter said: 'It is difficult to see anything other than a slow market for the rest of this year as underlying activity remains subdued.
 

'The rest of 2010 is likely to see rather lower lending and transaction numbers compared to the same period last year.

'Late 2009 saw a pick-up as some home buyers looked to move before the end of the first stamp duty holiday.'
 

The group expects 39,000 people to have homes repossessed this year, down from the forecast of 53,000 earlier in the year.
 

Data from the Bank of England, published today, also pointed to a slower mortgage market.
 

The bank's Trends in Lending report said the number of mortgages approved for house purchase 'edged down' in July.  The bank commented that the availability of credit had not changed significantly since the beginning of 2010, despite an increase in the number of different mortgage products on the market.
 

The bigger lenders believe mortgage lending will remain quiet in the coming months.  Director of mortgage broker Coreco, Andrew Montlake said: 'The modest rise in mortgage activity we've seen since May has been set against a low base, and although there has been a noticeable rise in the number of products available to borrowers, and more lenders returning to the market, the mortgage landscape is by no means close to returning to normal.'