Banks and building societies extended £13.1bn of credit to housebuyers in June, an increase of 15 per cent on May’s figure and seven per cent up on the previous year. First-time buyers were among those who benefited in the uplift, with the number of loans going to people without a foot on the property ladder increasing 20 per cent month-on-month to 19,400.
The total sum lent for mortgages in the second quarter – £35bn – was up marginally on last year, but remained well below the £93.9bn handed out in the same period of 2007. The CML warned the property market was unlikely to surge upward in the next six months.
“Transaction levels are subdued and likely to remain so while access to credit is constrained,” said CML economist Paul Samter.
The industry body also found fixed-rate home loans making a comeback. Nearly half of borrowers – 48 per cent – chose a fixed-rate mortgage in June, despite a historically low base interest rate of 0.5 per cent. This was due to lenders cheapening their deals.