July decline in mortgage lending

Latest figures from the Council of Mortgage Lenders (CML) show a decline in both the number and value of mortgages taken out in July.

Lending to home-buyers and those remortgaging fell during the month but at the same time lending not connected to the purchase of a home or remortgaging rose to an all time high of £7.8 billion.

This kind of lending is primarily made up of further advances to existing borrowers and financing for the buy-to-let sector. In July it accounted for 23% of all mortgage lending.

Loans for house purchases totalled 94,000 and had a combined value of £14.8 billion. Remortgages stood at 92,000 and totalled £11.5 billion.

Loans to first-time buyers fell by 7% as compared with June, to 32,400. The value of mortgages in this sector decreased by 4%, to £4.4 billion.

During July, the typical first-time buyer income multiple rose to a record 3.39, compared with 3.37 in June and 3.23 in July 2006.

Despite forecasts that interest rates were close to their peak, 79% of mortgages and remortgages taken out in July were fixed-rate.

According to the CML, a fall in lending between June and July has been evident over the past three years and it is therefore too early to confirm that the long-anticipated slowdown in the housing and mortgage markets has arrived.

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