Lending sees improvement

GROSS mortgage lending rose 26 per cent in July on the previous month but remains 36 per cent down on 2008, the Council of Mortgage Lenders (CML) said yesterday.<br /><br />In the latest sign of a relative improvement for the UK housing market, the CML figures showed that gross mortgage lending totalled an estimated &pound;16bn last month but this was still &pound;11bn lower than the July average over the past seven years.<br /><br />However, the CML maintained that lending volumes remained consistent with its forecast for &pound;145bn in gross mortgage lending.<br /><br />However, CML economist Paul Samter cautioned that the bounce-back in activity is limited in how far it can go against the current backdrop. He said: &ldquo;We anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge.&rdquo;<br /><br />Separately, data from the Bank of England showed that in June the flow of total net mortgage lending remained close to its lowest level since the monthly series began in April 1993.<br /><br />The Trends in Lending report also indicated that total net consumer credit flows appear to have stabilised at very low levels. The stock of lending to business fell yet again in June, dropping by &pound;0.9bn.<br /><br />The report said: &ldquo;The major UK lenders reported that capital market issuance had contributed to weak net bank lending and expected issuance to remain strong in the second half of the year. But smaller businesses, which don&rsquo;t have access to the capital markets, continued to find it difficult to obtain finance.&rdquo;