27/08/2010– Despite continued concerns about the state of the UK housing market, figures from the Council of Mortgage Lenders (CML) have revealed this week that mortgage lending in the UK in July was at its highest level for a year.
According to the CML research, a total amount of ã13.6 billion was advanced in July, a 5 per cent increase over Juneââ¬â¢s figures. This is the highest level since the ã14 billion advanced in June 2009.
However, the figure is still 3 per cent less than the same time last year, which suggest that the mortgage market is showing no sign of recovering. The Council of Mortgage Lenders also warned that levels of mortgage lending were likely to remain subdued until at least early 2011.
A slow mortgage market
Paul Samter, an economist at the CML, said: ââ¬ÅIt is difficult to see anything other than a slow market for the rest of this year as underlying activity remains subdued.”
Mortgage rates remain low, and so most home owners have managed to cope with the economic downturn without too many problems. Mr Samter continued, “The vast majority of households continue to pay their mortgages in full every month, and many have benefited from the record low interest rates. This looks set to continue for some time yet.ââ¬Â
The CML has predicted that total lending in 2010 will be ã140 billion.
House prices stagnating
The housing market has failed to pick up any real momentum in 2010 and Halifax recently reported that prices fell in June for the third consecutive month.
Other surveys have also shown that there are more properties being placed on the market than there are home buyers. This over supply also contributes to the downward pressure on property prices.
Most economists now expect house prices to be either static for the rest of the year, or to lose any gains that they made in the spring and early summer.
