Rise in mortgage lending is 'seasonal trend'

22/07/2009

Mortgage lending increased by nearly £2 billion month-on-month in June but the rise was down to "seasonal factors", economists have warned.

According to figures from the Council of Mortgage Lenders (CML), lending reached £12.3 billion last month, up from the £10.5 billion recorded a month earlier.

However, the figure was still 48 per cent lower than June 2008, while the overall second quarter figure was unchanged from the first three months of the year.

"The pick-up in June's lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer," said CML economist Paul Samter.

"But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement."

Mr Samter added that the new figures have not affected the CML's prediction of gross mortgage lending of £145 billion for 2009.

Tags; Current UK Economy,

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