Lenders: Mortgage lending down 5%
Mortgage lending fell by 5% last month as the "subdued" housing market reflected the wider weaknesses in the economy, lenders said.Some £11.9 billion was lent in June, a 5% fall month-on-month and year-on-year, as a "see-saw" effect caused by the ending of a stamp duty concession for first-time buyers continued, the Council of Mortgage Lenders (CML) said.
Lenders have been tightening their borrowing criteria in recent months and raising their rates, blaming the increased cost of funding a mortgage.
CML chief economist Bob Pannell said: "Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy."
But he said the "funding for lending" scheme announced by the Bank of England and the Treasury will help to guard against the market shrinking back further.
Gross mortgage lending in the second quarter of this year stood at an estimated £34.2 billion, making it 3% higher than it was a year ago.
There have been some signs of increased competition to attract customers with larger amounts of equity, but would-be buyers with low deposits are expected to have a particularly tough time finding a deal in the coming months. HSBC recently launched a five-year fixed deal with a record low rate of 2.99%, for example, but borrowers would need a hefty 40% deposit to take it up.
The British Bankers' Association (BBA) recently reported that mortgage repayments outstripped lending for the first time in May as households focused on paying down their debts.
Net mortgage lending declined by £73 million, the first reversal in the 16 years that records have been compiled by the BBA. The number of mortgage approvals for house purchase also slumped to its lowest level in 13 months, according to the BBA's figures.
The CML records advances, which happen a couple of months after approvals, mean the BBA's report could be a sign of what is to come.
Gross mortgage lending in the second quarter of this year stood at an estimated £34.2 billion, making it 3% higher than it was a year ago.
There have been some signs of increased competition to attract customers with larger amounts of equity, but would-be buyers with low deposits are expected to have a particularly tough time finding a deal in the coming months. HSBC recently launched a five-year fixed deal with a record low rate of 2.99%, for example, but borrowers would need a hefty 40% deposit to take it up.
The British Bankers' Association (BBA) recently reported that mortgage repayments outstripped lending for the first time in May as households focused on paying down their debts.
Net mortgage lending declined by £73 million, the first reversal in the 16 years that records have been compiled by the BBA. The number of mortgage approvals for house purchase also slumped to its lowest level in 13 months, according to the BBA's figures.
The CML records advances, which happen a couple of months after approvals, mean the BBA's report could be a sign of what is to come.
© 2013 Press Association