News: UK lending leaps to seven-year high

Tue, 21 Jul 15

Mortgage lending in the UK leapt to a seven-year high in June, with gross lending surging 29 per cent from the previous. Lending totalled an estimated £20.5 billion in June, 15 per cent higher than the £17.8 billion recorded in June 2014.

Gross lending in the second quarter of 2015 came to £52.2 billion which was up 17 per cent from the previous quarter’s £44.5 billion, and was a modest increase of 1 per cent on the second quarter in 2014 when it totalled £51.7 billion.

Forward indicators of lending suggest an upturn will be felt in coming months, as CML’s revised forecasts suggest.

CML economist Mohammad Jamei says: "Activity is picking up after a slow start to the year. Our lending figure for June may be flattered by the end of political uncertainties related to May’s general election, and the underlying picture is likely to be one of only modest recovery. This should be supported by favourable conditions in the economy, though it will be limited by rising house prices and affordability pressures."

Henry Woodcock, Principal Mortgage Consultant at IRESS, adds: "The likelihood of interest rates rising is increasing, but Mark Carney has reiterated that they are unlikely to hit anywhere like their historic norm, meaning mortgage rates are likely to remain attractive enough to stimulate borrower demand in the medium-term."

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