Mortgage lending on the increase

GROSS mortgage lending picked up strongly in June, according to figures released yesterday.

Lending came in at £12.6bn, up 16 per cent from the £10.8bn lent in May. Yet the figure was still nearly three per cent lower than at the same time last year, showing that the UK’s sluggish housing market is not out of the woods yet.

“June’s figures remain muted compared to long term norms,” said Howard Archer of IHS Global Insight. “The data are not seasonally adjusted and activity is usually higher in June.”

The Council of Mortgage Lenders (CML), which compiled the data, cited high consumer price inflation and “disappointing economic growth” for the ongoing housing market slump.

“This backdrop weighs negatively on purchase decisions relating to home ownership,” said CML chief economist Bob Pannell.

“By contrast, landlord activity appears to have picked up recently.”

Yet lending appears to have begun an upward trend. Lending in the second quarter came in at around £33.5bn, an 11 per cent increase from the first three months of this year (£30.1bn), the figures showed.