There were 56,000 loans for house purchase (worth £8.4 billion) advanced in July, up from 52,000 (worth £7.7 billion) in June, and from 53,000 (worth £7.3 billion) a year ago. While this reflects the seasonal rise in activity at what is usually a strong part of the year, these volumes still represent a very weak market, according to the CML.
The 28,000 remortgage loans (worth £3.5 billion) were unchanged from June and down from 40,000 (worth £4.9 billion) in July 2009.
Loans to first-time buyers declined to 19,400 (worth £2.4 billion) in July, from 19,700 (also worth £2.4 billion) in June and from 20,100 (worth £2.3 billion) in July 2009.
Having eased during the early part of the year, loan criteria have now tightened a little. First-time buyers put down average deposits of 24% in the month, unchanged from June but up from a recent trough of 21% in April and May.
But low interest rates mean that interest payments continue to take up a relatively modest share of income. At 13.2% this was down slightly from the previous month and the lowest it has been since early 2004.
First-time buyers' share of the market was at 34% in July, down from 38% in June. This is the lowest proportion since before the credit crunch began in August 2007.
Lending to home movers picked up in July. There were 36,900 loans (worth £6 billion), up 13% in volume and 15% in value from June and 11% in volume and 20% in value from a year earlier.
Like first-time buyers, home movers have seen their average deposits rise again - from 33% in June to 35% in July. But their interest payments as a percentage of income have held steady at 9.6% - still the lowest share going back to the early 1970s.
The take-up of full repayment products has remained high for a year. In July, 90% of first-time buyers took out a repayment mortgage, compared to July 2007, before the credit crunch, when only 67% did. 72% of home movers and 70% of those remortgaging also chose a full repayment mortgage in July this year.
Commenting on the data, CML economist Paul Samter said: "The increase in the prevalence of repayment mortgages is likely in part to reflect the anticipation of regulatory changes by the Financial Services Authority to limit the availability of interest-only mortgages.
"More generally, lending criteria remain tight, underpinned by caution on the part of both borrowers and lenders in the light of continuing economic uncertainty."
Richard Sexton, director of business development at surveyor e.surv said: “The RMS figures for July are interesting but don’t tell the whole story about the summer property market.
“It’s bad news that overall house purchase lending was so weak in July – but the good news is that’s not turned out to be a UK wide phenomenon.
“The health of Britain’s property market differs very significantly across the regions. For instance, over the year to August 2010, e.surv carried out 15.4% fewer surveys and valuations in Northern Ireland compared to the year before - but 25.0% more in London. We carried out 14.4% more in the East Midlands, and 1.8% fewer in Scotland.
“Whilst headline national figures are interesting, it would be foolish to think house purchase activity is uniform across the UK.”
Paul Hunt, managing director of Phoebus Software Ltd, said: “These figures represent nervousness about the future of the economy. It’s encouraging that the numbers are up on last year but we’d have hoped for higher and more valuable activity to show that the market is firmly on the road to recovery.
“Uncertainty surrounding our economic future was bound to have an impact on the housing market sooner or later. And both lenders and borrowers have been cautious amid the uncertainty surrounding inflation, the impact of public spending cuts, and the health of the UK property market.
“With the summer always a quiet time for the market it won’t be until the September figures are released that we get a real sense of how the end of the year is likely to turn out.
“But if we enter the autumn at a trot rather than a canter we’re unlikely to see huge growth before 2011.”
