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| Mortgage lending still increasing | Mortgage lending still increasing |
| (20 minutes later) | |
| Mortgage lending continues to rise, according to the latest figures from the Council of Mortgage Lenders (CML). | Mortgage lending continues to rise, according to the latest figures from the Council of Mortgage Lenders (CML). |
| Gross lending in July stood at £16bn, 26% higher than in June, though still more than a third lower than in July last year. | Gross lending in July stood at £16bn, 26% higher than in June, though still more than a third lower than in July last year. |
| Mortgage lending, house sales and property prices have all picked up in the past few months after a dramatic slump caused by the banking crisis. | Mortgage lending, house sales and property prices have all picked up in the past few months after a dramatic slump caused by the banking crisis. |
| But the CML warned the housing market would slow down again later this year. | But the CML warned the housing market would slow down again later this year. |
| "The CML's July gross lending estimate of £16 billion is the highest level in nine months and consistent with the rise in house purchase approvals," said the CML's economist Paul Samter. | "The CML's July gross lending estimate of £16 billion is the highest level in nine months and consistent with the rise in house purchase approvals," said the CML's economist Paul Samter. |
| "But the bounce-back in activity from the extreme weakness around the turn of the year, coinciding with a seasonal bounce, is limited in how far it can go against the current back-drop. | "But the bounce-back in activity from the extreme weakness around the turn of the year, coinciding with a seasonal bounce, is limited in how far it can go against the current back-drop. |
| "We anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge," he added. | "We anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge," he added. |
| Less expensive loans? | |
| Typically, would-be borrowers now have to put down an average deposit of 25% if they want to take out a mortgage. | |
| Over the past month there had been no further increase in their appetite to lend at high loan-to-values Bank of England | |
| The latest "Trends in Lending" report, from the Bank of England, said there had been little sign of this rationing of the home loan market easing up. | |
| "In line with rising mortgage approvals, gross lending for house purchase has continued its recovery since the beginning of the year, but remortgaging activity remains very subdued," the Bank said in its August report. | |
| "The major UK lenders reported that over the past month there had been no further increase in their appetite to lend at high loan-to-values (LTVs)," it added. | "The major UK lenders reported that over the past month there had been no further increase in their appetite to lend at high loan-to-values (LTVs)," it added. |
| The Bank's report pointed out that 90% mortgages had become much more expensive, relative to 75% mortgages, than they were before the banking crisis started in 2007. | |
| That was because of the increased risk of default associated with the larger LTV mortgages. | |
| But the Bank said some lenders had indicated to it that if the risk of further house price falls eased off, they might make their 90% mortgages slightly less expensive compared to their 75% loans. |