20th August 2015
Gross mortgage lending reached £22bn in July, marking the highest monthly total for seven years, according to the Council of Mortgage Lenders.
The trade body’s latest numbers show that last month’s total is 9% higher than June and 14% higher than July 2014.
In fact the latest numbers represent the highest monthly figure since gross lending reached £23.6bn in July 2008.
Mohammad Jamei, CML economist said July’s figure was in line with his expectations that lending would strengthen in the second half following subdued activity earlier in the year.
He said: “We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers. Today’s data is in line with our forecast that gross lending will rise to £209bn this year, 3% higher than in 2014.”
John Eastgate, sales and marketing director of OneSavings Bank believes fears that the Bank of England was gearing up for an interest rate rise caused an uplift in re-mortgaging in July, “as homeowners raced to refinance before the cost of borrowing began to tick up”.
He added: “We’ve seen continued resilience in the buy-to-let market in spite of the tax changes announced in the Budget, and this has underpinned wider lending growth. However both last week’s MPC minutes and the current weight of low inflation seem to have pushed back rate rise expectations into next year, so mortgage rates should remain historically attractive for longer.
“It is not all plain sailing. House prices are still on upward trajectory, which is doing nothing to take the sting out of entering the market for buyers. Unless serious commitments are made to build more homes, the supply deficit will continue to move the property ladder out of reach of those struggling to find a firm footing, causing greater long-term reliance on the private rental sector.”