Gross lending to homebuyers was up 15% in June to £13.1bn, according to new data released today by the Council of Mortgage Lenders (CML). This includes all UK mortgage deals, including both those taking first time buyer mortgages and remortgaging.
This was up 7% on June 2009 and the highest figure so far in 2010. However, June figures traditionally contain a seasonal boost in demand for first time buyer mortgages, and the underlying trend still indicated restrained lending by banks, and subdued demand from homeseekers, compared to previous years.
Some experts have predicted that lending may flatten as the year progresses, as the Government gets to grips with cuts in the public sector, implements the rises in taxes from the June 2010 budget, and freezes on wage increases begin to hit home, particularly with those seeking a first time buyer mortgage.
“Our gross lending estimate of £13.1bn in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity,” said Paul Samter, economist with the Council for Mortgage Lenders CML.
“There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs.”
Samter also had a word of warning for homebuyers seeking a first time buyer mortgage. He referred to new guidelines that require banks and building societies to restraint in lending, so that those with first time buyer mortgages would not be overstretched and less likely to have difficulty with mortgage repayments in the longer term.
“The FSA [Financial Services Authority] has outlined a clear direction of travel as part of its mortgage market review. The consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit.”
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