According to the Council of Mortgage Lenders (CML), mortgage lending increased to £12.7bn in July. That’s 8% higher than June’s figure of £11.7bn.
The first six months of 2012 were turbulent ones for the property and mortgage markets, with a number of unusual, one-off events occurring which affected performance. The end of the stamp duty holiday in late March saw a flurry of first time buyer activity and a surge in mortgage lending activity, which then dropped back sharply in April.
It’s also worth noting that the CML’s June figures revealed a slump in actual lending and a 20% fall in remortgaging. Furthermore, July’s £12.7bn figure is still only a third of what it was back in the summer of 2007, when the property market peaked.
The CML’s July report pointed out that a number of indicators seemed to suggest a softening in the market but has warned that these should be treated with caution until the one-off events stop occurring in the autumn.
They also pointed out that whilst remortgaging has experienced a dip, house purchase lending has remained relatively buoyant throughout the second quarter of the year. In June, a total of 83,000 properties changed hands, an increase on the May figure. Surveyors reported a dip in the number of transactions in July, but seasonal factors are thought to have been responsible for this. Surveyors told the CML that their expectations for the coming months are largely positive.
In terms of actual house prices, the picture isn’t quite so positive. The CML pointed out that Halifax and Nationwide reported a drop in nationwide house prices in July. The Royal Institute of Chartered Surveyors (RICS) has confirmed that with the exception of London, prices have been falling in all regions and that it expects them to continue to do so in the coming months.
CML market and data analyst Caroline Purdey said: “Gross mortgage lending showed an 8% increase from last month, continuing the see-saw pattern seen throughout this year, albeit against a broadly flat market.
Interpretation of recent trends continues to be challenged by one-off effects. We look forward to the September figures, when the distorting effects of the Diamond Jubilee and the Olympics should largely have worked their way through.”
The news comes just four days after HSBC revealed that all the funds allocated to its market-leading 2.99% five-year fixed deal have now been exhausted.
Sources: CML, Guardian