Gross lending in July totalled £25.2 billion, 2 per cent lower than in June. The figure is 13 per cent lower than the £29 billion of gross lending in July 2004.
Lending for house purchase decreased slightly in July to £11.8 billion, from £12 billion in June. The proportion of mortgage lending for house purchase remained static in July at 47 per cent and the proportion of loans going to first-time buyers and movers remained the same at 29 per cent and 71 per cent respectively. Remortgaging saw a slight increase of £200 million to £10.3 billion.
Michael Coogan, director-general of the CML, said: “The figures indicate that the housing market has started to stabilise at a new lower level last seen in 2003.
“The recent 0.25 per cent cut in interest rates by the Bank of England should help ensure that this stability continues over the coming months by giving a much needed boost to consumer confidence concerning future interest rates.”
Figures released by the Building Societies Association (BSA) for July also showed that lending remained steady.
Adrian Coles, director-general of the BSA, said: “As predicted mortgage lending has continued at a steady pace. Although the figures are down from the heights of 2004, the market looks like it has adjusted to a more sensible level.”
David Dooks, director of statistics at the British Bankers Association (BBA), commented: “July’s growth in lending to individuals slowed from the recent trend. In the case of mortgages, this could have reflected that consumers were waiting for the widely anticipated cut in interest rates in August.”
