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Mortgage lending increased in May

Mortgage lending increased in May

Category: Mortgages

Updated: 18/06/2010
First Published: 18/06/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The amount lent to consumers for mortgages recorded an increase of 7% in May, and is well up on 12 months ago.

A gross amount of £11.3 billion was lent to homebuyers in May, up from £10.7 billion in April and an increase of 10% on May 2009, according to the Council of Mortgage Lenders (CML).

However, while the market is more buoyant than it was a year ago, it is still subdued, and turnover of homes has actually fallen slightly from the end of last year.

As such, the CML said that gross mortgage lending in 2010 as a whole may not hit the projected £150 billion mark.

"The ground has been cleared for next week's Budget to be the start of an austerity drive to get the public finances onto a more sustainable footing," said Paul Samter, CML economist.

"We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy - particularly on household finances and confidence."

Separate figures from Assetz House Price Watch show that average house prices were 7.8% higher in May than at the same time in 2009.

The average house price in May was £200,347, according to figures, representing annual growth of 7.8% from May 2009 – falling back from the high rate of annual growth recorded in April (9.1%).

Amongst the best two year fixed rate mortgages currently on offer are a deal from The Co-operative Bank at a rate of 2.95% for borrowers with a 25% deposit, and a deal from HSBC at 2.99%, requiring a 30% deposit.

For borrowers looking for a variable rate mortgage deal for term, a rate of 2.29% is available from first direct which requires a 35% deposit, while ING Direct offers a deal at 2.84% needing a 25% deposit.

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