Mortgage lending rises 15% in June

Mortgage lending increased 15% in June compared to last month, new data has shown. 

Gross mortgage lending was an estimated £13.1 billion in June, up from £11.4 billion in May and £12.2 billion in June last year, according to the Council of Mortgage Lenders (CML).

This means gross lending (the amount of money lent including repayments) in the second quarter of 2010 was up 17% from the first quarter of this year, and up 7% from the second quarter of 2009.

Paul Samter, CML economist, said: ‘Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity’.

‘There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained’, he said.

Samter however added that the Financial Services Authority’s consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit.

The news comes as the latest survey from property website Rightmove shows house prices have fallen for the first time this year.

Jonathan Samuels, chief executive of property finance specialists, Drawbridge Finance, said: 'Mortgage lending may be up slightly, primarily due to seasonal factors, but in the short-term both the mortgage and property markets remain delicately poised'.

'Ever-increasing supply and falling demand, driven largely by difficulties securing mortgage finance, could place downward pressure on prices in the months ahead. There is a considerable financing shortfall that is unlikely to be made up for some time yet,' he added.