Mortgage lending soars in June

The volume of mortgage lending in June reached its highest level since October 2008, according to the latest figures from the Council of Mortgage Lenders (CML).

The data, which also shows that gross lending in the second quarter of 2013 was likewise the highest since Q4 2008, backs up recent evidence of a thawing in the housing market, with prices rising and housebuilders reporting surging profits.

The CML said gross mortgage lending hit £15bn in June, up from £14.7bn in May, and 26% higher than the £11.9bn reported the same month last year. The second quarter gross lending figure of £42bn, was 24% up on the first three months of the year, backing anecdotal reports of a strengthening market since chancellor George Osborne announced a package of pro-housing measures in the March budget.

CML chief economist Bob Pannell cautioned that while the figures represented an improvement on performance for the last few years, “it is worth bearing in mind that this is still barely half of activity rates a decade earlier, and so far below what might be considered normal levels.”

David Brown, commercial director of LSL Property Services, said: “By any measure, 26% annual growth is definitely a positive sign. What’s especially encouraging are the lower [mortgage] rates that are slowly trickling through to borrowers with less equity.  

“Of course it’s still very early days, and the number of people renting is still rising too. A whole year of months like June would bring gross mortgage lending to half its 2007 peak.”