Mortgage lending rises 15pc to its highest level since 2008
Gross mortgage lending rose to £19.1bn in July, the Council of Mortgage Lenders (CML) said today – the highest monthly figure since August 2008, when it stood at £19.3bn.
The figure rose 17 per cent from £16.7bn in July 2013, and seven per cent from June's £17.9bn. The number of property transactions also increased, by 25% compared with the same period a year ago, but the CML suggested "intensifying affordability pressures could start to dampen this upwards trend".
The rise suggests cooling measures introduced by the Bank of England in June, which include limiting lending to 4.5 times income and "stress tests" to ensure borrowers can still pay if the base rate rises to three per cent, have had a muted effect. But CML market and data analyst Caroline Offord said the eventual outcome "remains uncertain".
Economic conditions have strengthened but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged.
A rise in lending usually signals a rise in demand – but the figure stands in sharp contrast with house price growth, which fell to 10.2% in the year to June, according to official figures published on Tuesday.