Gross mortgage lending has hit a six-year high reaching £19.1bn in July, according to the Council of Mortgage Lenders.
July’s figure is 7 per cent higher than the previous month and is 15 per cent higher than July last year. The CML said this is the highest monthly figure since August 2008 when it hit £19.3bn.
Caroline Offord, CML market data and analyst said: “Mortgage activity seems to have remained robust following the regulatory changes but the eventual impact of these remains uncertain.
“Property transactions in the first half of the year showed a 25 per cent increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect that intensifying affordability pressures could start to dampen this upwards trend.
“Economic conditions have strengthened but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged.”
Jeremy Duncombe, director at Legal and General Mortgage Club, added that the increased housing market activity “has led lenders to raise projections of what they will lend this year”.
He said: For the first time since 2008, the Council of Mortgage Lenders expects that more than £200bn will be lent by the end of this year. Certainly from our recent conversations with lenders, they are confident they have the capacity and also the appetite to meet this extra demand.
“With confidence returning to the economy, we expect a new normal level for lending to be around £240bn to £250bn per year, with much of this coming from the intermediary channel as lenders’ distribution models evolve.”
Last month, the CML estimate for gross mortgage lending in June was £17.5bn, with the trade body admitting at that time that the Mortgage Market Review was impacting the lending market.
