Mortgage lending in June hit a new high for the third consecutive month,
according to the latest figures from the Council of Mortgage Lenders.
Total gross mortgage lending by banks and building societies rose to
£15bn from £13.6bn in May – the most lent in one month since CML
records began in 1998.
Lending purely for house purchase shot up to £9.6bn last month from
£8.5bn in May and £7.7bn in June 2000. Remortgaging continued its
steady rise, increasing to £4.4bn from £4.2bn in May and
£3.3bn last June, but fell as a proportion of total mortgage lending
to 29 per cent from 31 per cent.
Average new mortgage rates dropped again to 5.45 per cent in June from
5.53 per cent in May, with average new variable rates falling to 5.27 per
cent from 5.34 per cent. Variable rate mortgages accounted for 71 per cent
of lending last month.
Figures from The Building Societies Association support the CML findings.
Mutuals' gross advances hit £2.3bn in June, up from £2.2bn in May
– the third month in a row societies have experienced a rise. Mortgage
approvals also increased, reaching £2.3bn last month from £2.1bn
Despite the record figures, the CML predicts rising house prices will lead
to a slowdown in lending over the remainder of the year.
CML director general Michael Coogan says: “Although mortgage lending has
again reached record levels, income multiples have been edging up over the
past year as a result of house price rises. The likelihood is that over the
coming months house prices and lending will begin to level off in response
to deteriorating affordability.”