Gross mortgage lending falls 5% to £11.9bn, CML
Commentator criticises CML’s claims that mortgage market is “see-sawing”, stating that it conversely has no direction.
The Council of Mortgage Lenders estimates that gross mortgage lending in June totalled £11.9bn, representing a 5 per cent fall from both the previous month and from the corresponding period in 2011.
Gross lending for the second quarter of 2012 was therefore an estimated £34.2bn, a 2 per cent increase from the first three months of this year (£33.6bn) and a 3 per cent increase from the second quarter of 2011 (£33.3bn).
Lending in the first half of this year totalled £67.9bn. This is 7 per cent higher than the first six months of 2011 (£63.7bn).
Bob Pannell, chief economist at the CML, highlighted that mortgage lending has experienced a “see-saw pattern” over recent months, largely reflecting the short-term spike and subsequent trough in house purchase activity associated with the ending of the stamp duty concession for first-time buyers in late March.
He said: “Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy.
“The recent launch of the funding for lending scheme comes at a time when credibility in further quantitative easing had started to wane.
“[The scheme] will help guard against a contraction in lending over the next 18 months and, if the external environment is sufficiently supportive, should underpin the housing market and support the government’s wider growth agenda.”
Jonathan Samuels, chief executive of Dragonfly Property Finance, said: “To say the market is see-sawing is an understatement. There is no direction at all in the mainstream mortgage market, it’s simply mirroring the agonies of the economy.
“Given the failure of previous schemes to get the high street banks lending, there’s no reason to believe that the Funding for Lending initiative will fare any better. The Government could well be flogging a dead horse.
“For the mortgage market to move forward in any material way, you need confidence among borrowers and confidence among high street lenders. At present, neither has much of it at all.
“As we move into the business end of the summer, the mortgage market is likely to become even more subdued. It will be the autumn before we have a better idea of how it is performing.”