Save, make, understand money

Buy To Let

Mortgage lending hits highest monthly figure since 2008

Hannah Uttley
Written By:
Hannah Uttley

Mortgage lending rose to £24bn last month, the highest monthly figure sine July 2008.

The Council of Mortgage Lending predicted that gross lending will rise to £209bn in 2015, 3% higher than in 2014, as July’s figures increased by 9% on the previous month and 14% higher than the same time last year.

Industry experts said low mortgage rates combined with increased competition in the market had helped boost figures in what would normally be a quiet month for lending.

Mohammad Jamei, CML economist, said: At £22bn, our estimate of gross lending in July is the highest monthly total for seven years, but is in line with our expectation that lending would strengthen in the second half following subdued activity earlier in the year.

“We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.”

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), warned that affordability constraints would remain a concern for borrowers.

“The outlook for the second half of 2015 certainly looks positive, with an improving economic backdrop encouraging greater activity in the mortgage and housing markets,” he said.

“However, affordability concerns will be at the front of people’s minds and threaten to limit the recovery. Even with a modest interest rate rise, there is little prospect of house prices calming down unless the number of new homes on the market starts to catch up with demand.”