The Council of Mortgage Lenders estimated gross mortgage lending reached £20.7bn in June, 16 per cent higher than May’s lending total of £17.8bn and 3 per cent up on the £20.1bn lent in June last year.
This is also the highest June figure in eight years, when gross lending reached £22.6bn in 2008.
Gross mortgage lending for the second quarter was therefore an estimated £56.1bn, 10 per cent less than the first quarter this year, but 8 per cent more than the second quarter last year.
CML senior economist Mohammad Jamei admitted the result of the EU referendum is likely to affect the housing market, but there remains considerable uncertainty.
“Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed,” he explained.
“But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80 per cent from post-crisis lows.”
As with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80 per cent from post-crisis lows. Mohammad JameiHe suggested activity over the next six months is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.
“We also expect some form of easing to be undertaken by the Monetary Policy Committee when it meets on 4 August, given the uncertain outlook that has set in after the vote result,” added Mr Jamei.
Mark Harris, chief executive of broker SPF Private Clients, confirmed mortgage availability is still good and lenders still have a lot of appetite.
He said: “Although a rate rise was expected at the last MPC meeting, this has now been pushed back and could come in August. Cheap mortgage rates are likely to continue to be available,” he stated.
“The fall in sterling is attracting interest from overseas buyers but they may wait a little to see how the situation settles before committing to a property purchase.”
Meanwhile, HM Revenue & Customs’ latest property transaction figures showed the provisional, seasonally-adjusted UK property transaction count for June was 94,550 for residential.
The estimate of the number of residential property transactions increased by 4.9 per cent between May and June, while this month’s seasonally adjusted figure is 10.2 per cent lower compared with the same month last year.
Stephen Smith, director at Legal & General Housing Partnerships, said a supply and demand crisis is continuing to plague the housing market, causing house prices to rise well above the level of inflation.
“Without more homes, we’ll only continue to see transactions languish and lending rise as people borrow more to cover the costs of homeownership,” he added.
peter.walker@ft.com
