CML reports 23% rise in mortgage approvals for June

CML reports 23% rise in mortgage approvals for June

The Council of Mortgage Lenders (CML) has today revealed that the number of mortgages approved for house purchase soared 23% in June, compared with May.

The rise is the fifth consecutive monthly increase and represents the highest level for a year.

According to the CML, 45,000 home loans were granted during the month – just 6% lower than June 2008 and is certain to fuel hopes of a recovery in the housing market.

However, the group cautions that the level is far from a return to the housing boom and first-time buyers still need an average deposit of 25% in order to secure a mortgage.

First-time buyers were granted 17,200 loans during the month, totalling £1.9 billion – more than a quarter on the previous month.

CML economist Paul Samter comments: “Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity.”

“There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels,” adds Mr Samter.

Meanwhile, the number of loans for remortgaging rose by 13% compared with May. Record low interest rates are “dampening” the demand for remortgaging, according to the CML.

In other news today, the Royal Institution of Chartered Surveyors (Rics) said house prices will rise over the next few months due to a shortage of homes for sale.

According to Rics, part of the renewed optimism within the housing market comes as a result of demand from new buyers outstripping supply.

The organisation said just 8% more surveyors reported seeing price falls than those who said the cost of homes increased – this represents the lowest figure for two years.

Furthermore, 29% of surveyors predicted sales levels would rise going forward.

However, Jeremy Leaf of Rics, cautions: “Although demand for property is continuing to rebound, it still remains low from a historical perspective.”

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