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Mortgage lending up 23% but not yet ‘normal’, says CML

Mortgage lending rose by 23 per cent in June compared to May but transactions are still weak on a historic basis, according to the latest figures from the Council of Mortgage Lenders.

CML says there were 45,000 house purchase loans in June worth £5.9bn up from 36,500 a month earlier. This is less than half the average number of loans in June over the last seven years.

The number of loans for remortgage increased by 13 per cent to 34,000 loans in June. But CML says low interest rates have “dampened demand” in the second quarter with 96,000 remortgage loans, a 21 per cent fall from 122,000 in the previous quarter.

There were 17,200 loans to first-time buyers worth £1.9bn, up from 13,700 in May but below the 18,400 in June last year.

CML economist Paul Samter says: “Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity.

“There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels.”

Meanwhile, the latest survey from the Royal Institution of Chartered Surveyors published today says 8 per cent more chartered surveyors expect prices to rise rather than fall over the next three months, its highest reading since April 2007.

RICS says improved optimism for prices can partly be attributed to increased interest from new buyers not being matched by supply coming onto the market.

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