CML: Mortgage lending edges higher in July

| September 13, 2011 | 0 Comments

The Council of Mortgage Lenders (CML) has reported the number of loans for house purchase rose in July.

According to the Council, there were 48,400 loans advanced for house purchase in the month – up by 1,000 from June’s figure but almost 7,000 lower when compared with July 2010.

Commenting on today’s figures, Paul Smee, director-general of the CML, said: “August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months.”

Meanwhile, of the 48,400 loans, 18,200 were provided to first-time buyers – a fall of 1,300 lower when compared to the same month a year ago.

First-time buyers have to put down an average deposit of 20% in order to secure a mortgage, according to the Council.

With house prices edging higher for the year to date, the average new mortgage has gone back up to £120,000, the CML said, meaning affordability remains a major issue for first-time buyers.

Meanwhile, remortgaging also edged higher in July, with 31,500 loans worth £4 billion – up 1% on June’s figure.

Remortgaging has remained subdued during the historically low interest rate environment but soaring inflation over the last few months has led to speculation that interest rates will be lifted.

The British Bankers’ Association (BBA) recently announced house purchase approvals came in at 33,417 for July, activity having gathered pace since June (32,123) and exceeded the previous six-month average (30,695).

However, while the CML said the UK mortgage market is holding steady, many still believe that activity and mortgage lending is expected to remain subdued throughout the remainder of the year as a result of uncertainty surrounding the economy and rising unemployment.

In other news today, the Royal Institution of Chartered Surveyors (Rics) said just 14 homes were sold per estate agent in the three months to August – the lowest level for over two years.

Furthermore, more surveyors reported price falls than price rises in August, the Rics said.

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