Mortgage lending drops

City A.M. Reporter
Gross mortgage lending fell three per cent on the year in June but was 16 per cent up on the month, the Council of Mortgage Lenders (CML) said.

The CML said gross mortgage lending totalled £12.6bn in June, the highest monthly total in almost a year.

It said lending in the first half of this year totalled £63.7bn, only slightly below the first six months of 2010.

The CML said that worries about the economic outlook and pressure on household incomes had deterred buyers, but that it expected rental demand to support the <a href="";>housing market</a>.

"UK households have made progress in bringing down debt burdens over the past year or so, but this largely stems from the restricted levels of new mortgage lending, unsecured write-offs and nominal income growth. Households in aggregate are not repaying their mortgage debt more quickly," said CML chief economist Bob Pannell.

"Recent headlines on repossession prospects appear overplayed, given that the state of our economy does not warrant large interest rate rises for the foreseeable future. But we do expect to see moderately higher arrears and possessions through the second half and into 2012, as we have previously forecast," he added.