Mortgage lending rose by 8 per cent last month, as the property market continues to show the high levels of volatility that have characterised it for much of 2012 so far.
Figures published by the Council of Mortgage Lenders show that gross mortgage lending rose to £12.7bn, 8 per cent up from the previous month’s figure of £11.7bn and 2 per cent higher than the figure for July 2011.
The figures from June 2012, however, represented a major slump in lending caused by a big fall in re-mortgaging and £12.7bn is just one third of the level seen in the summer of 2007 when the market was at its peak.
A variety of factors have been blamed for the continued volatility seen this year –including the end of the first time buyers stamp duty holiday in March and distraction caused by the Olympics.
CML market analyst Caroline Purdey said: “One off effects have made trends difficult to calculate this year. We look forward to the release of September’s lending figures, when the distortion caused by earlier events should have worked its way through.”
July 2012’s figures cover a period leading up to the introduction of the new Funding for Lending scheme, whereby banks will be able to access cheaper borrowing, provided they pass it on to customers. This has brought some new deals into play already, but it is not yet clear how it will affect the level of lending.
Mark Harris, Chief Executive of SPF Private Clients, a major mortgage broker, said: “It might be too early to call the end of mortgage famine, but there are certainly encouraging signs. Lenders must now deliver more help for first time buyers, in the form of smaller deposits and competitive rates.”.