Data from the Council of Mortgage Lenders shows that the number of mortgages granted in July was 6,900 lower than the comparable month in 2010.
48,400 home loans were made in July and although this was 1,000 up on the previous month, there’s still a long way to go before we see mortgage lending recover to pre-recession levels.
First time buyers accounted for 18,200 of the July mortgages, 300 down on June and 1,300 down on July 2010. The average first time buyer deposit still stands at 20%.
Paul Smee, the director general of the CML, said that last month’s global financial turmoil does not suggest that contractor mortgage lending will continue to improve in the next few months. House prices have risen slightly this year and the average new mortgage is now £120,000. This pushed gross lending up to its highest level since August 2010. However, consumer confidence is not high at present and this could also put a dampener on the housing market.
Bank of England figures show that 49,239 new mortgages were approved in July, but not yet released to home buyers. This was the third consecutive monthly increase and normally would suggest that an upturn in sales was imminent.
Brian Murphy from the Mortgage Advice Bureau, said the base rate is expected to remain at 0.5% well into 2012, and maybe even longer. But before the housing market can return to normal, mortgage lending levels have to improve.
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