Opinion Former Article

Late summer rise for gross mortgage lending in August

The Council of Mortgage Lenders estimates that gross mortgage lending reached £22.5 billion in August - 7% higher than July’s lending total of £21.1 billion. In addition to the month-on-month rise, lending rose 15% year-on-year, from £19.5 billion in August 2015. This is the highest August figure since 2007 when gross lending reached £33.6 billion.

Commenting on market conditions in this month’s market commentary, CML senior economist Mohammad Jamei said:

“Widely voiced fears in recent months about the housing market have proved to be wide of the mark. Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016. However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.

“This recovery in sentiment is likely to be down to a number of different factors, including the Bank of England’s monetary stimulus and its introduction of the Term Funding Scheme in August. A subsequent uptick in approvals is anticipated, albeit still at levels lower than earlier this year as affordability constraints and lack of properties on the market for sale continue to bear down on borrowers. The Bank also continues to indicate another rate cut on the cards, if medium term prospects remain unchanged.”


NOTES TO EDITORS

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly mortgage lending press release and gross lending press releases relate 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.

3. The CML's gross mortgage lending estimate for September will be published on Thursday 20 October 2016.

4. This month's full market commentary can be viewed on the CML website under the News & Views - Analysis section.


CONTACT

Michelle Vosper
Public affairs manager
Council of Mortgage Lenders
020 7438 8926

Tamsin Askew
Junior press officer
Council of Mortgage Lenders
020 7438 8981

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