Slight rise in mortgage lending in June 2009 - offical figures
21/07/2009
There was a small rise in the amount of mortgage lending in June the latest figures have revealed.
The Bank of England's Trends in Lending report, published today, states the flow of net mortgages in June "rose a little" after May saw the lowest level of mortgage lending since 1993.
The rise has been attributed to government efforts to push lenders to lend more.
Major UK lenders saw a rise in approvals for house purchases and the Bank reports lenders are increasing their appetite for higher loan-to-value (LTV) deals as profit margins on them grow.
The interest rate on an average 90 per cent LTV mortgage was 6.47 per cent in June. Meanwhile for borrowers with more equity the interest rate was likely to be significantly lower the average being 4.47 per cent on a 75 per cent LTV deal.
Council of Mortgage Lenders (CML) also reported today an increase in gross mortgage lending in June, to £12.3 billion - up 17 per cent on April, but still down some 48 per cent on gross lending levels in June 2008.
CML economist Paul Samter said: "The pick-up in June’s lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer.
"But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement."
Andrew Montlake, director of mortgage broker Coreco, added the rise in mortgage lending was more connected to a seasonal swing than a major shift from lenders.
"Lenders are still not lending enough to meet consumer demand and where lending is taking place, this is coming at a price," he said.
"A sustained increase in lenders' willingness to lend is vital to provide the boost to the economy that is so desperately needed."
The Bank of England's Trends in Lending report, published today, states the flow of net mortgages in June "rose a little" after May saw the lowest level of mortgage lending since 1993.
The rise has been attributed to government efforts to push lenders to lend more.
Major UK lenders saw a rise in approvals for house purchases and the Bank reports lenders are increasing their appetite for higher loan-to-value (LTV) deals as profit margins on them grow.
The interest rate on an average 90 per cent LTV mortgage was 6.47 per cent in June. Meanwhile for borrowers with more equity the interest rate was likely to be significantly lower the average being 4.47 per cent on a 75 per cent LTV deal.
Council of Mortgage Lenders (CML) also reported today an increase in gross mortgage lending in June, to £12.3 billion - up 17 per cent on April, but still down some 48 per cent on gross lending levels in June 2008.
CML economist Paul Samter said: "The pick-up in June’s lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer.
"But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement."
Andrew Montlake, director of mortgage broker Coreco, added the rise in mortgage lending was more connected to a seasonal swing than a major shift from lenders.
"Lenders are still not lending enough to meet consumer demand and where lending is taking place, this is coming at a price," he said.
"A sustained increase in lenders' willingness to lend is vital to provide the boost to the economy that is so desperately needed."