Gross lending drops 6% to £11.7bn in June

Gross lending totalled £11.7bn in June, 6% lower than May’s total of £12.5bn and 7% lower than in last June.

But the Council of Mortgage Lenders says that figures show that lending to first-time buyers during the month was at its highest since July 2010 – with the exception of March this year, when first-time buyer activity was boosted by the stamp duty concession.

House purchase lending showed a modest increase in June, with 47,500 loans, worth £7.1bn advanced an increase on the preceding month of 2% by volume and 1% by value. Year-on-year, lending for house purchase was flat, down 1% by volume but up 1% by value. But there was a marked decline in re mortgaging, perhaps driven by expectations that borrowing rates could fall later in the summer.

Borrowers took out 23,400 re mortgaging loans, worth £3.1bn, which was 21% lower by volume and 18% lower by value than in May, and down year-on-year 25% by volume and 18% by value. The CML’s director general Paul Smee says: “Lending figures have see-sawed in the first half of the year, and we may see more fluctuations in the coming months as the effects of the Olympics and other special events in the UK this year are reflected in our lending numbers. “Within that broader context, first-time buyer activity is showing some signs of resilience as we move away from the obvious effects of the stamp duty concession, a trend that it would be good to see maintained.”