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Malone predicts tougher times after record June

Premier Mortgage Service managing director John Malone warns that the second half of the year will be difficult for the mortgage industry despite record lending in June.

Council of Mortgage Lenders’ preliminary statistics show gross lending reached £176.8bn in the first half of 2007 from £159.8bn last year.

June’s record figure of £34.2bn was up from £31.4bn in May but the CML notes that this was the lowest monthly increase for June in three years.

PMS has seen a significant increase in business this year, processing £27.2bn in applications compared with £22.8bn last year.

Completions reached £20bn in the first six months against £16.7bn last year.

Last week, broker alliance Concordia revealed that it processed £5.4bn in mortgage business in the first half, up by 40 per cent on last year. It believes it is on schedule to submit over £11bn in applications this year.

But Malone says the market is set to worsen as the effect of the recent interest rate rises takes hold.

He says “The first half of the year has seen the purchase and remortgage market being fairly good but I think the situation will get fairly awkward in the next half of the year.

“Affordability is worsening, there are around 500,000 properties empty because they are either too expensive or in the wrong place, so there are quite a lot of issues to overcome.”

Buildings Societies Association figures for June showed that approvals fell for the second consecutive month to £4.69bn from £4.75bn in May.

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