Mortgage market still subdued says CML
The mortgage market continued to be subdued in July, data from the latest regulated mortgage survey by the Council of Mortgage Lenders (CML) has shown.
The CML said demand for mortgages continued to be weak in what has traditionally been a strong month for sales.
There were 56,000 loans for house purchase (worth £8.4bn) advanced in July, up from 52,000 (worth £7.7bn) in June, and from 53,000 (worth £7.3bn) a year ago.
CML said while this reflected the seasonal rise in activity at what is usually a strong part of the year, the volumes still represented a very weak market.
The 28,000 remortgage loans (worth £3.5bn) were unchanged from June and down from 40,000 (worth £4.9bn) in July 2009.
Loans to first-time-buyers declined to 19,400 (worth £2.4bn) in July, from 19,700 (also worth £2.4bn) in June and from 20,100 (worth £2.3bn) in July 2009.
First-time-buyers' share of the market was at 34 per cent in July, down from 38 per cent in June.
This was the lowest proportion since before the credit crunch began in August 2007.
Paul Samter, economist at the CML, said the increase in the prevalence of repayment mortgages was likely in part to reflect the anticipation of regulatory changes by the Financial Services Authority (FSA) to limit the availability of interest-only mortgages.
He said: "More generally, lending criteria remain tight, underpinned by caution on the part of both borrowers and lenders in the light of continuing economic uncertainty."
Richard Sexton, director of business development at surveyor e.surv, said the figures were interesting but did not tell the whole story.
He said: "It’s bad news that overall house purchase lending was so weak in July – but the good news is that’s not turned out to be a UK wide phenomenon.
"The health of Britain’s property market differs very significantly across the regions.
"For instance, over the year to August 2010, e.surv carried out 15.4 per cent fewer surveys and valuations in Northern Ireland compared to the year before - but 25.0 per cent more in London."