Home loan lending in the UK rose by almost a quarter in June, providing further evidence of stabilisation in the mortgage market.
The number of home purchase loans totalled 45,000 in the month – a 23 per cent increase on the 36,000 in May, according to figures from the Council of Mortgage Lenders (CML).Its members account for around 98 per cent of all residential lending in the UK.
The value of mortgage lending in the month was £5.9 billion, a substantial rise of 26 per cent on May's total.
A quarterly comparison also offers some encouragement that the housing market has bottomed out and is now on the way up. In the last three months, 116,700 house purchase loans were approved, doubling the number in the first three months of the year.
Loans for remortgaging increased by 13 per cent to total 34,000 loans in June but low interest rates have seen demand fall by 21 per cent over the quarter compared to January to March this year.
"Low interest rates and realistic selling prices have helped generate a welcome increase in transaction, but there is still some way to go before we reach normal levels of activity," said CML economist, Paul Samter.
"There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels."
The number of loans given to first time grew by 26 per cent in June compared to May, totalling 17,200 and worth £1.9 billion.
Fixed rate deals increased in popularity throughout the second quarter, making up almost four in five new mortgage loans – the largest share for two years and reflective of the widespread availability of fixed products on the market.
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