Mortgage lending down 5%
Thursday 19 July 2012
Mortgage lending fell by 5% last month as the “subdued” housing market reflected the wider weaknesses in the economy, lenders said today.
Some £11.9 billion was lent in June, a 5% fall month-on-month and year-on-year, as a "see-saw" effect caused by the ending of a stamp duty concession for first-time buyers continued, the Council of Mortgage Lenders (CML) said.
Lenders have been tightening their borrowing criteria in recent months and raising their rates, blaming the increased cost of funding a mortgage.
CML chief economist Bob Pannell said: "Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy."
But he said the "funding for lending" scheme announced by the Bank of England and the Treasury will help to guard against the market shrinking back further.
Gross mortgage lending in the second quarter of this year stood at an estimated £34.2 billion, making it 3% higher than it was a year ago.
There have been some signs of increased competition to attract customers with larger amounts of equity, but would-be buyers with low deposits are expected to have a particularly tough time finding a deal in the coming months.
HSBC recently launched a five-year fixed deal with a record low rate of 2.99%, for example, but borrowers would need a hefty 40% deposit to take it up.
The British Bankers' Association (BBA) recently reported that mortgage repayments outstripped lending for the first time in May as households focused on paying down their debts.
Net mortgage lending declined by £73 million, the first reversal in the 16 years that records have been compiled by the BBA.
The number of mortgage approvals for house purchase also slumped to its lowest level in 13 months, according to the BBA's figures.
The CML records advances, which happen a couple of months after approvals, mean the BBA's report could be a sign of what is to come.
Elsewhere in the report, figures showed a fall in lending to small and medium-sized enterprises, while credit availability was broadly unchanged for businesses, according to respondents to the Bank's Credit Conditions Survey.
The Bank said credit was normally available for firms with strong balance sheets, while some smaller firms reported they were still often unable to secure loans.
The major UK lenders said demand from small and medium-sized enterprises remained subdued, the Bank added.
John Cridland, CBI director-general, called for rules on protective cash buffers to be relaxed to help unclog lending to businesses.
He said: "With lending levels falling and prices rising, we need immediate action to boost lending in the economy to help growth.
"The Government has this week announced good initiatives to boost exports, and the Funding for Lending scheme should help lower costs, but action on liquidity buffers would have most impact now.
"The Treasury and Bank of England have signalled a willingness to relax liquidity rules, but the FSA needs to drive forward with these changes immediately so that banks can release funding into the economy."
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Arsenal 1 Everton 1: Substitute equalises with six minutes to go
food + drinkMichelin-starred Tom Sellers on being this year's hottest property
booksGeese, gorillas, grandads... and growing up
tvParents (and kids) rejoice! A new wave of fantastic family entertainment is here
food + drinkHow one grocery e-tailer is gearing up for the Yuletide rush
food + drink
- 1 Hundreds arrested as Canadian police smash worldwide paedophile ring
- 2 Sherlock series 3: Benedict Cumberbatch and Martin Freeman provide teasers for the biggest comeback in British television
- 3 The man who made Femen: New film outs Victor Svyatski as the mastermind behind the protest group and its breast-baring stunts
- 4 Mass murder in the Middle East is funded by our friends the Saudis
- 5 Japan cracks down on leaks after scandal of Fukushima nuclear power plant
- < Previous
- Next >
iJobs Money & Business
£25000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C++ Server Dev...
£300 - £350 per day: Harrington Starr: Leading Electronic Trading Software Ven...
£80000 - £100000 per annum + benefits + bonus: Harrington Starr: Project Manag...
£50000 - £60000 per annum + benefits + bonus: Harrington Starr: Business Analy...
Day In a Page
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.
John Lennon's childhood home in Liverpool to be sold at auction. Guide price: £150,000-£250,000.
A six-bedroom detached period property with secluded gardens, ample parking and a double garage in Rye, £675,000.
A large split-level property with three double-bedrooms and roof terrace, close to Crouch End Broadway, £625,000.
A charming barn conversion in the picturesque Cotswold village of Ilmington with three bedrooms, a detached garage, workshop and beautifully manicured gardens £675,000.
A three-bedroom new build, ground-floor flat with two bathrooms, close to Bermondsey tube, £445,000.
A three-bedroom house in an enviable new development moments from Oxshott High Street, with secluded garden and decked area, £385,000
A two-bedroom split-level flat with stunning south-west facing roof terrace in the popular Brondesbury Conservation Area, £549,950.
A charming 16th century, three-bedroom detached house in Bidborough with picturesque garden