Mortgage lending 5% down in June
The mortgage market continues to be volatile, with lending falling by 5 per cent in June, after a sharp rise in May.
According to the Council of Mortgage Lenders a total of £11.9 billion was lent to first-time buyers and those moving house, last month.
In May, gross mortgage lending totalled £12.5 billion.
Lending for the first half of 2012 is now £67.9 billion, 7 per cent higher than for the 2011 first half.
Bob Pannell, the CML’s chief economist, said: “Mortgage lending has experienced something of a see-saw pattern over recent months, largely reflecting the short-term spike and subsequent trough in house purchase activity associated with the ending of the stamp duty concession for first-time buyers in late March.
“Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy.”
Some analysts suggest that the dip in mortgage lending is likely to be followed by a fall in house prices in the second half of the year.
Howard Archer, Chief UK & European Economist at IHS Global Insight said:
“The drop in gross mortgage lending in June reported by the CML reinforces our suspicion that house prices are likely to trend modestly lower over the coming months.
“Specifically, we expect house prices to fall by around 3% over the rest of this year.”
Meanwhile, the rental market is booming and research by Mortgages for Business has found that many landlords are planning to expand their property portfolios.
The company’s research suggests that 84% of investors planning to expand are considering buying houses or flats in the next six months.
David Whittaker, managing director at Mortgages for Business, said: “Landlord appetite for buying residential property is high.
“This will support the private rented sector and ease the strain on would be renters chasing too few properties.”