Council of Mortgage Lenders: Lending static in July according to CML

Thursday, 18, Aug 2005 12:00

Gross lending in July totalled £25.2 billion, 2% lower than in June, according to the latest data from the Council of Mortgage Lenders. This figure is 13% lower than the £29 billion of gross lending in July 2004.

Lending for house purchase decreased slightly in July to £11.8 billion, from £12 billion in June. This figure is 19% lower than the £14,600 billion this time last year. The proportion of mortgage lending for house purchase remained static in July at 47% and the proportion of loans going to first-time buyers and movers also remained the same, at 29% and 71% respectively.

Remortgaging saw a slight increase (£200 million) to £10.3 billion. Remortgaging as a proportion of total lending also increased to 41% from 39% in June.

The average pricing of fixed-rate products declined for the ninth consecutive month to 5.31% from 5.36% in June. As a proportion of all loans, fixed-rate products increased to 50% from 47% last month, the highest proportion since December 1998. The pricing of variable-rate products fell for the seventh consecutive month to 5.68% from 5.76% a month earlier. Variable-rate products as a proportion of loans also fell to 49% from 53% in June.

Commenting on the latest figures, CML Director General Michael Coogan said:

"Today's figures indicate that the housing market has started to stabilise at a new lower level last seen in 2003. The recent 0.25% cut in interest rates by the Bank of England should help ensure that this stability continues over the coming months by giving a much needed boost to consumer confidence about future interest rates. Our recently published forecasts predict a steady housing market in the next couple of years, and so we expect to see similar levels of lending in the coming months."