CML: mortgage lending hits £20.7 billion in June

22nd July 2016

The Council of Mortgage Lenders estimates that gross mortgage lending totalled £20.7 billion in June.

This is 16% higher than May’s lending total of £17.8 billion and 3% higher than the £20.1 billion lent in June 2015. It is the highest June figure in eight years, when gross lending reached £22.6 billion in 2008.

Gross mortgage lending for the second quarter of 2016 was estimated at £56.1 billion. This is 10% lower than the first quarter of 2016 but 8% higher than the second quarter of 2015.

CML senior economist Mohammad Jamei said: “The result of the EU referendum is likely to affect the housing market, but there remains considerable uncertainty. Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed.

“But, as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.

“We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 4 August, given the uncertain outlook that has set in after the vote result.”

Henry Woodcock, principal mortgage consultant at IRESS, said: “One month on from the leave vote, rates are predicted to stay low for another two years. Investment in the mortgage market continues with new lenders such as Atom Bank and others coming to market in the next six to 18 months.

“House prices have not dropped drastically. In fact, figures from the Office for National Statistics released on Monday show the average house in the UK now costs a record £211,000, up 8.1% on a year ago.”