Mortgage lending rose 7% in May

18 June 2010

Written by Michael Aglony

Gross mortgage lending increased by seven per cent in May to an estimated £11.3 billion compared with £10.5 billion the previous month.

Statistics from the Council of Mortgage Lenders (CML) showed a ten per cent year-on-year rise in the value of home loans, which was £10.2 billion at the same point in 2009.

Paul Samter, economist at the body, said that he did not expect to see taxes introduced that specifically target housing and mortgages in next week's Budget, but the imposition of austerity measures in the wider economy will have a knock-on effect on the market.

"Financial sector regulation is a further source of uncertainty," he added, referring to the government's decision to extend the Bank of England's control over the amount provided for home loans.

With "macro prudential" powers, the institution will be responsible for the stability of the mortgage lending system as well as imposing limitations on individual companies, Mr Samter went on.

In a separate statement, the CML recently commented on the new legislation, describing it as unnecessary, with director-general Michael Coogan arguing that the sector is currently relatively risk-averse and any irresponsible behaviour would be assuaged by international and domestic measures already in place.

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