House lending steady in June after new rules

MORTGAGE lending held steady in June, with a new set of mortgage regulations helping to cool off the rapid growth of housing credit, according to the Council of Mortgage Lenders (CML).

During May, £16.5bn was issued in credit, only £8m less than was approved in April. Lending is still up 12 per cent on May last year, but down from October’s £17.6bn, a recent high.

“Market indicators point to a slowdown in activity levels, in part associated with new mortgage rules, but it is unclear how lasting this will be,” said Bob Pannell, CML’s chief economist, referring to the Mortgage Market Review, which came into effect at the end of April.

If June’s lending figure is similar to May’s, about £49.5bn would be extended in mortgage lending during the second quarter of the year. This would be a higher figure than was recorded during the first quarter of the year, and about 18 per cent higher than the same three-month period in 2013, but still a decline from the fourth quarter’s reading.

“Now is not the time to impose limits on lending: doing so could effectively clip the wings of the market before it has had a chance to fully recover,” said Brian Murphy of Mortgage Advice Bureau.