Mortgage lending fell 5% in June

Graham_Devon

Total mortgage lending, for both home buyers and people moving lenders, fell back in June.

The Council of Mortgage Lenders (CML) said £11.9bn was lent by its members last month.

After a sharp rise the previous month, June's figure was down by 5%, both from May's lending figure and also from June last year.

But the CML said lending for the first half of the year was now 7% higher than in the first half of 2011.

New mortgage scheme please

Lewis1967

If its falling still with 300 year low interest rates and such tiny deposit requirements then certainly tis a time for worry. What else can they do to stop mortgage lending falling?

People are shouting about China's property market, well consider they still have 6% interest rates and average 40% deposit.

Thrugelmir

Lewis1967 wrote: »

What else can they do to stop mortgage lending falling?

Lend more? Then again banks don't want to.

So lending will continue to remain constrained.

IveSeenTheLight

Graham_Devon wrote: »

New mortgage scheme please

Ok, the quirp was not that bad, but try considering the data and why it is so.

Consider what happened the previous months.

The slump in activity that followed the end of the first-time buyer stamp duty holiday appears to have been short-lived as house purchase lending increased substantially in May

In May, house purchase lending increased by 36% compared to April and 29% compared to last May. The number of loans also increased, by 33% from April and by 24% from a year ago.

Remortgage lending also increased in May with £3.5 billion advanced for remortgage. This was up from £3.1 billion in April but down from £3.8 billion 12 months ago when there was a greater expectation of interest rate rises.

First-time buyer activity bounced back following the volatility of March and April. 18,100 loans, worth £2.3 billion, were advanced to first-time buyers in May, up from 12,700, worth £1.5 billion, in April. This may be a 43% rise (53% by value) from April but, following the distorting effects of the end of the stamp duty concession, this returns first-time buyer lending back to a similar level seen in the second half of 2011

The characteristics of first-time buyer loans began to return to normal after March and April’s stamp duty effect. First-time buyers on average took out a loan of £104,000 in May, up from £97,750 in April. They also borrowed 3.21 times their income, up from 3.12 in April and they paid 19.6% of their income in capital and interest payments, up from 19.1%. All of these May figures are more in line with the typical experience over the last year. The proportion of first-time buyers buying properties valued at between £125,000 and £250,000 rose from 37% in April to 44% in May, but was not quite back at the norm of around 50% seen since 2007.

Lending to home movers also increased with 30,200 loans taken out, worth £4.9 billion. This was up 29% by number and value compared to April and up 25% (29% by value) from May 2011.
Repayment loans continue to dominate within all groups. 98% of loans taken out by first-time buyers were on a capital repayment basis, unchanged since March, 87% of home movers took this option, up from 85% in April and 82% of those remortgaging also did, unchanged since April.

P.S. the CML are saying the data is estimates, not stats yet
http://www.cml.org.uk/cml/media/press/3264

movilogo

Just 5% drop doesn't matter. Unless we a fall over 20%, no one will realize that houses are overpriced.