Gross mortgage lending rose to £15 billion in June, a 26 per cent rise on the £11.9 billion figure for the same month in 2012, according to estimations from the Council of Mortgage Lenders.
The lending figure also represented a 2 per cent rise from £14.7 billion in May and was the highest monthly estimate for gross lending since October 2008.
Gross lending for the second quarter of 2013 was therefore an estimated £42 billion. This represents a 24 per cent increase from the previous three months and is the highest quarterly estimate since Q4 2008.
Commenting on market conditions in this month’s Market Commentary, CML chief economist Bob Pannell observes: “Improvements in the cost and availability of mortgage credit are underpinning a meaningful recovery in the housing market. In recent months, we have seen the strongest performance for mortgage lending since 2008.
“However, although the pace of first-time buyer activity is approaching a quarter of a million per annum, it is worth bearing in mind that this is still barely half of activity rates a decade earlier, and so far below what might be considered normal levels.”
Commenting on the figures Sophie Hall, Head of Intermediary at Avelo, said: “The mortgage market is flying at the moment, and the turbulence from the financial crisis seems to be finally settling. First-time buyers are snapping up mortgage rates while they are still grounded, and this demand is boosting the housing market from the bottom. Government initiatives have added thrust, but we have also seen lenders thinking outside the box to encourage new buyers, typified by the new 0% product from Leeds Building Society.
“The summer months tend to see buyer activity tail-off, but this year we are likely to see demand for finance sustained. There is still a backlog of buyers who have put moves on hold since 2008 and these should continue to filter through over the coming months as confidence improves.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented: “This summer we’ve seen the housing market rally, helped by restored confidence, government stimulus and data like the increased mortgage lending reported this morning by the CML. Lenders are loosening lending criteria and this combined with government policy and innovative lender products is also really making a difference. However, despite all the positive indicators from the statistics, it is still a fairly regional picture, with pockets of the country slower to react. With that in mind, it would be unwise to underestimate the positive benefits of stimulus and remove it before the industry is able to support itself fully.”
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