Mortgage lending bounces from low base

James Moore,Deputy Business Editor
Thursday 11 August 2011 00:00 BST
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New lending figures yesterday suggest that the housing market could be picking up from its recent nadir with the highest number of first-time buyers entering market for 10 months. But economists said that, while the 22 per cent rise in mortgages approved in June compared to May was welcome, activity remains muted and the outlook is far from rosy.

The Council of Mortgage Lenders said there were 46,700 loans approved in total for house purchases in June worth £6.7bn.

However, that represents an 11 per cent fall on June 2010. The total value of the loans taken out also decreased by 13 per cent compared to the previous June. Among them, there were 18,100 loans to first-time buyers, worth £2.2bn, 24 per cent higher by volume and 29 per cent higher by value than in May. June's first-time buyer numbers were exactly the same as in last August, though they were down on last year, by 8 per cent both in terms of the number of loans and their total value.

June is also usually a busy month for house purchases, so a rise was to be expected, and housebuilders and others continue to complain that it remains extremely hard for first-time buyers to obtain home loans.

Taking the second quarter of 2011 as a whole, there were 122,000 loans for house purchases, worth £17bn, up from 97,200, worth £14.1bn, in the first quarter.

But once again, the figures were lower than in the second quarter of last year, when there were 138,300 loans, worth £20bn.

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