According to data from the trade body, mortgage lending totalled £17.5bn in June, a year-on-year increase of 17 per cent when compared with the same month last year.
It was also the highest monthly amount lent out since October 2013.
Gross mortgage lending during the second quarter of the year is estimated to total £50.8bn, a 10 per cent increase on the first three months on 2013 and a 21 per cent increase when compared to the second quarter of 2013, when it totalled £41.9bn.
Bob Pannell, chief economist at the CML said it was difficult to predict when lending restrictions introduced in June. e said: “The macro-prudential intervention announced by the Financial Policy Committee in late June are finely calibrated and precautionary but could nevertheless reinforce April’s MMR in tipping the UK towards a more conservative lending environment.”
This came as the Bank of England issued its Lending Report, in which it suggested that some lenders were increasingly lending at 90 per cent loan-to-value. Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: “We are still some way off a fully functioning mortgage market, even with a 21 per cent annual increase in gross lending.
“With new checks and balances in place, there is still room for muted growth without the risk of careering out of control. The combination of MMR and macro-prudential action means there is now a strong safety harness fastened firmly around lending activity.”
However, Duncan Kreeger, director of lender West One Loans, said that lending was facing a new squeeze, saying: “The credit crunch is being replaced by a supply crunch. Without enough homes to go around, there’s just no way that the rest of the economy can keep up with higher prices.
“Restricting loan ratios and income multiples may be prudent, but cannot solve the problem. Affordable homes aren’t about arcane restrictions on the mortgage market. It all boils down to not having enough of the right properties in the right place.”
Key Stats
UP: Gross mortgage lending reached £17.5bn in June
UP: Gross mortgage lending reached £16.8bn in May
Adviser view:
Brian Murphy, head of lending for national mortgage adviser the Mortgage Advice Bureau, said the mortgage market was “finely balanced at the halfway point of 2014”.
He said: “On the one hand, interest rates are creeping upwards, homes for sale are scarce and new measures are keeping lending activity in check. On the other , the clock is ticking down on cut-price borrowing and aspiring buyers will be conscious that their mortgage costs may be significantly lower if they can buy before rates – and house prices – climb any higher.
“Despite all the speculation, buyers should keep a clear head given that rate rises are likely to be fractional at best. There will certainly be no overnight shock and there is still plenty of time to seek advice on securing a good deal.”
