Today the Council of Mortgage Lenders, (CML) has reported that mortgage lending in June showed a “significant rise”, up 29% on the previous month to an estimated £20.5 billion. This is also a year on year increase of some 15%.

Whilst an increase in mortgage lending figures was expected, especially given the drop in service levels from lenders we have seen due to high numbers of applications, the end of the drawn-out election process and a new government has helped to push things forward.

With interest rates remaining low for the foreseeable future and a new wave of competition between lenders expected to rage over the second half of the year, I suspect that this upward trend will continue, albeit by perhaps more modest amounts.

The main constraints are not consumer demand, but rather lenders underwriting criteria and affordability considerations which are still tight following the implementation of the Mortgage Market Review. As competition between lenders begins to shift from simply cutting rates to opening up their criteria once more, this should help further, but with a drastic lack of housing stock, especially in high demand areas of the country limiting supply and keeping property prices high, there is only so far this can go.

 

 

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