Gross mortgage lending figures were up 9% on a monthly basis in June, reaching £22.1bn, compared to May’s total of £20.3bn. On a yearly basis, figures climbed 3% from the £21.5bn recorded in June last year.
The figures were released by UK Finance, the newly formed trade body that includes the Council of Mortgage Lenders.
Gross mortgage lending is now estimated to hit £60.3bn in Q2, up 3% on Q1 and 6% on the £57.1bn recorded in Q2 2016.
Mohammad Jamei, senior economist at UK Finance said:
"A period of belt-tightening now seems to be underway as inflation begins to erode consumer spending power, and consumer confidence weakens. Given that the economy and housing market are closely linked, this has contributed to the activity plateau since the start of the year.
"Looking ahead, housing market activity is likely to reflect economic conditions – a deterioration would likely dampen first-time buyer numbers and homeowners remortgaging – the factors that have supported lending recently."
Jeff Knight, Foundation Home Loans’ marketing director said:
“On the surface, it may not seem like lending levels are particularly strong but look a little closer and re-mortgaging activity is keeping things moving along quite nicely. This is despite the challenge of inflation outstripping wage growth – as we may have seen an unexpected dip at the last reading, but inflation remains on an upward march.
“First-time landlords in particular remain in pole position, with purchase incentives and continued low mortgage rates taking the edge off uncertainty generated by the wider political and economic picture. Looking ahead to the looming PRA changes, however, it’s important the more established landlords are thinking ahead, planning and reviewing their positions.”
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