CML: July lending static

Lending for house purchase fell slightly last month to 11.8 billion, according to the Council of Mortgage Lenders.

11:21 18 August 2005

Lending for house purchase fell slightly last month to 11.8 billion, down from 12 billion in June, according to new housing market figures.

Latest data from the Council of Mortgage Lenders (CML) shows that gross lending in July this year totalled 25.2 billion, two per cent lower than in June 2005 and 13 per cent below gross lending in July 2004.

The proportion of mortgage lending for house purchase remained static in July at 47 per cent and the proportion of loans going to first-time buyers and movers also remained the same, at 29 per cent and 71 per cent respectively.

According to the CML, remortgaging saw a slight increase of 200 million to 10.3 billion over July 2005 and increased as a proportion of total lending from 39 per cent in June to 41 per cent in July.

The average pricing of fixed-rate products declined for the ninth consecutive month from 5.36 per cent to 5.31 per cent in July and fixed-rate products increased as a proportion of all loans to 50 per cent. The pricing of variable-rate products fell for the seventh consecutive month to 5.68 per cent from 5.76 per cent a month earlier and to 49 per cent as a proportion of loans.

CML director general Michael Coogan commented: "Today's figures indicate that the housing market has started to stabilise at a new lower level last seen in 2003. The recent 0.25 per cent cut in interest rates by the Bank of England should help ensure that this stability continues over the coming months by giving a much needed boost to consumer confidence about future interest rates.

"Our recently published forecasts predict a steady housing market in the next couple of years, and so we expect to see similar levels of lending in the coming months."