Lending for residential property up in UK but outlook still subdued

By Bridging Loan Directory -

Gross mortgage lending in the UK is 10% stronger than a year ago but commentators say that the long term outlook is still subdued.

Figures releases today (Tuesday 20 September) by the Council of Mortgage Lenders show that gross mortgage lending was an estimated £13.4 billion in August, a 6% rise from £12.6 billion in July and a 10% increase from £12.1 billion in August 2010.

This is the highest monthly total since July 2009 when it was £14 billion and the highest monthly total for August since 2008 when it was £19.3 billion.

‘Much of the recent variation in monthly lending figures appears to have reflected seasonal factors, with the underlying picture being one of activity levels that continue to be subdued but broadly stable,’ said CML chief economist Bob Pannell.

‘The August performance more or less offset the weaker than expected July figure. Taking July and August together, lending has shown little change on the same months of 2009 and 2010,’ he added.

Duncan Kreeger, Chairman of bridging lender West One Loans said:

Mortgage offers look pretty attractive at the moment and we’ve certainly seen the evidence of that here at West One Loans.  Over August, we saw a very high proportion of our bridging loans paid back early.  These premature redemptions reflect how much easier it was to secure long-term mortgage finance in August compared not only to July this year but also August 2010.  Having said that, we think this is a fillip.  The long-term trends don’t look very different to us.  Strict lending criteria on the high street combined with the growth in the private rented sector look set to continue driving growth in the bridging market.”