Gross mortgage lending leapt by 29% in June to its highest level in seven years, as uncertainties over the election disappeared. However, mortgage lenders say they do not expect the post-vote bounce to continue, and a survey of borrowers suggests confidence in the housing market is slipping.
The latest monthly data from the Council of Mortgage Lenders (CML) showed borrowers took out an estimated £20.5bn of new loans in June, compared with £15.9bn in May. Year-on-year lending was up by 15% from the £17.8bn advanced in June 2014.
The figure was the highest since July 2008, when the credit crunch was affecting the housing market.
The CML said the figure may have been “flattered” by an end to uncertainties around the general election. At the top end of the market, buyers had feared a mansion tax on homes costing more than £2m, while first-time buyers may have stalled in case a Labour pledge to cut stamp duty became a reality.
The June jump in lending brought gross lending for the second quarter to a total of £52.2bn, which was up 17% from the previous quarter’s £44.5bn, but only by 1% on the second quarter in 2014 when it came to £51.7bn.
The start to the year has been quieter than anticipated, and the CML has cut its forecasts for lending for 2015 and 2016 as rising house prices made it tougher for people to buy.
