24% rise in gross mortgage lending

Published by Max Salsbury for 24dash.com in Housing and also in Finance

Gross mortgage lending in May was an estimated £12.2 billion, a rise of 24% from April.

According to data released by the Council of Mortgage Lenders (CML), May was also up 13% on May 2011, when lending stood at £10.8 billion.

The CML does not publish statistics for mortgage approvals, thus the data relates to mortgage advances only.

A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender.

CML chief economist Bob Pannell said: “The government has recently announced a number of measures to counter the adverse effects from the Eurozone crisis.

“It clearly senses an opportunity to bolster home ownership and housing activity, and we look forward to hearing more details about the “funding for lending” initiative which seeks to deliver this.

“Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market. Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market.”

Of the rise Michael Coogan, strategic adviser at Deloitte’s financial services practice, said: “The bounce back in gross lending in May is a welcome sign that borrowers are still keen to transact.

"The new "funding for lending" scheme should provide new opportunities for consumers to access the market in an affordable way. While short-term lending trends are difficult to call, the market improvement in 2012 is set to continue.”

The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK.

There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.