Mortgage lending up and housing market expected to recover

29 June 2010

Written by Jeni Browne

Net mortgage lending rose by £1.2 billion in May, up from the £1 billion increase seen in April, according to statistics from the Bank of England.

The rate of growth is quickening, with the figures showing a monthly increase of 0.1 percentage point last month.

However, mortgage approvals remained broadly unchanged, with 49,815 home loans authorised in May - a slight decline from 49,828 in April.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said that these figures probably reflected the political and economic uncertainty that emerged around the time of the election.

"Rics expects activity in the housing market to gradually pick up over the next few months helped by the new government's decision to abolish Hips [home information packs]," he commented.

Additionally, nearly three-quarters of respondents to the latest Housing Market Survey conducted by the body stated that they predicted a rise in instructions after the scrappage of Hips - a lack of which was holding the sector back, Mr Rubinsohn added.

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