Mortgage lending down in July says CML

Bob Pannell: Housing market is "subdued, but pretty stable"

Gross mortgage lending in the UK fell to £12.6 billion in July, a one per cent drop from the previous month, and six per cent lower than in the same month last year when the figure stood at £13.3 billion.

Commenting on the latest Council of Mortgage Lenders (CML) figures, CML chief economist Bob Pannell said the housing market is “subdued, but pretty stable”. “Seasonal factors continue to provide some support, but underlying house purchase activity may drift lower over the coming months,” he added.

Paul Hunt, managing director of Phoebus Software said: “It would be easy to think a six per cent fall from what was very subdued level of lending 12 months ago means the mortgage market is falling off a cliff. But there are signs that lending has been remarkably resilient. When you bear in mind that in the UK, growth currently looks fragile and that the eurozone debt crisis means lenders are anxious to maintain a high level of liquidity, July’s lending figures could have been a lot worse”.

But Peter Rollings, CEO of estate agent Marsh & Parsons said: “Lending remains a world away from the level we need to see for the national housing market to pick up steam again. Despite the recent improvement in mortgage rates, demand for mortgage finance is still being thwarted by overly strict criteria. Until lenders address the dearth of lending to lower income buyers, we won’t see a renewed recovery in the national housing market.”