Mortgage lending soars in June according to CML

The Council of Mortgage Lenders (CML) has said that the amount of lending has soared to its highest level in eight years.

The amount of money being borrowed by homeowners last month is the highest June level for eight years, according to the Council of Mortgage Lenders (CML).

Following recent Brexit uncertainty, gross mortgage lending has showed no signs of uncertainty as it hits an eight year high, with £20.7Bn lent in June.

This shows a 16% monthly rise and a 3% rise from June last year, however the money lent in June was still significantly lower than the £26.1Bn lent out in March, when there was a rush to buy.

The rush to buy came as a result of a 3% surcharge on stamp duty, which began in April and affected landlords and anyone who owns more than one property.

Separate figures for HM Revenue and Customs said the number of homes sold rose by 4.9% during the month. A total of 94,500 houses or flats were sold during June, according to their figures. Although that was more than in May, it was 10.2% lower than in June last year.

The figures suggest that homebuyers did not necessarily hold back due to the uncertainty of the EU referendum on the 30 June, although higher mortgage lending also reflects the increasing house prices, which are still rising at 8.4% a year, according to Halifax.

CML senior economist, Mohammad Jamei, said: “The result of the EU referendum is likely to affect the housing market, but there remains considerable uncertainty. Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed.

“But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.”

 

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