Gross mortgage lending hits record monthly level in June

The Council of Mortgage Lenders (CML) has announced that gross mortgage lending hit a record level in June, with £32.2 billion of loans being secured.

This beats the previous monthly record, which was set in May at £29.1 billion, and is an increase from the £25.7 billion that was seen in June 2005.

Strong levels of lending are traditionally seen in the sixth month of the year as a reflection of the increasing buying activity that takes place in the spring months.

Accordingly, the 11 per cent month-on-month rise that was seen is in line with previous increases in June.

As well as traditional seasonal activity, the high level of lending last month also reflected house price growth and high levels of remortgaging, CML director general Michael Coogan said.

“The strength of the London market is also a factor, with property prices and mortgages substantially higher than in other parts of the UK,” Mr Coogan added.

“The level of mortgage approvals shows that demand for houses and remortgages remains strong, so we expect to see continued robust lending during the summer months.”

The risk of an interest rate rise was described as a “real” one owing to inflation increasing above the Bank of England’s target and this could lead to demand and lending decreasing as the year progresses.