Gross mortgage lending has risen to its highest June level in eight years, new figures show.
The Council of Mortgage Lenders estimates that gross mortgage lending reached £20.7 billion in June.
This is 16% higher than May’s lending total of £17.8 billion, and 3% higher than the £20.1 billion lent in June last year.
HM Revenue and Customs said the number of homes sold increased by 4.9% between May and June. In total, 94,550 residential transactions were completed, 10.2% lower compared with the same month last year.
House purchases surged in March as buyers brought forward transactions to beat the 1 April stamp duty deadline on second homes.
There was then a cooling off in the market because of the rush and partly as a result buyers putting off transactions as they awaited the outcome of the referendum.
Mohammad Jamei, CML senior economist, said he expects activity to soften modestly over the next six months.
He said: “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.”
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “Mortgage lending is continuing to increase on an annual basis despite uncertainty around the EU referendum, illustrating that peoples’ desire to own a property remained strong in the run up to the vote.
“The outcome of the referendum could cause some prospective buyers to postpone entering the market until the dust has settled, prompting a short-term slowdown in activity. That said, we still expect lending to continue to grow in the coming years, albeit at a more reduced pace due to decreased foreign investment and uncertainty around the future economic landscape following the UK’s decision to leave the EU.”
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