New data from the Council of Mortgage Lenders (CML) has revealed that gross mortgage lending increased by 17 per cent during May, with ‘seasonal factors’ cited as a reason for increased activity in the property market.
Paul Samter, Economist at the CML, said the seasonal trend of increased lending at this time of year could boost lending volumes for the rest of the summer.
Although gross mortgage lending in June, at £12.3 billion, was 17 per cent up from the £10.5 billion figure recorded in May, the lending total was 48 per cent down on the £23.8 million level in June last year.
Mr Samter commented: “The combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement.
“Our forecast for gross mortgage lending of £145 billion this year is unchanged.”
Keshav Thukaram, Managing Director of property website Smartlandlord.co.uk, described the increase in lending volumes as good news for the stability of the housing market, as it should moderate price falls on property investments.
But he noted that first-time buyers and buy-to-let investors could still struggle to obtain suitable mortgage finance because of their perceived risk to lenders.
“In time, first-time buyers will find they have more financing options than buy-to-let investors,” Mr Thukaram added.