Lenders Approving More Home Loans

Mon, 20 Jul 2009

The volume of home loans approved by mortgage lenders swelled in June, the Council of Mortgage Lenders (CML) has revealed. Lending rose from £10.5 billion in May to £12.3 billion in June, representing the highest figure of any month this year. Whilst optimistic experts have interpreted the news as a sign of recovery, most are viewing the figures in line with annual seasonal increases in the summer, whilst the sum is 48 per cent lower than June 2008. Indeed, a report from the Bank of England suggested the credit market remained subdued, but predicted it would ‘continue to strengthen’ in the remainder of the year.

Lending totalled an estimated £33.3 billion in the second quarter of 2009 – the same level as in the first quarter of the year. Although the lowest level since the first quarter of 2001, it does suggest that the market has bottomed out and that the incessant interest rate reductions from the Bank of England, as well as the quantitative easing programme, may have had an effect. In light of the quarterly figures, the CML has maintained its £145 billion forecast for gross mortgage lending in 2009. An upturn in the market is expected in the second half of 2009 as buyers are enticed by a growing supply of more affordable loans .
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