Gross mortgage lending at highest level since October 2008

Key points

• Gross mortgage lending in June increased to £15 billion
• This is a rise of 2% from £14.7 billion in May
• On an annual basis, this is 26% higher than the total of £11.9 billion in June 2012
• June 2013 is the highest monthly estimate for gross lending since October 2008

The Council of Mortgage Lenders estimates that total gross mortgage lending in June increased to £15 billion, representing a rise of 2% from £14.7 billion in May and 26% higher than the total of £11.9 billion in June 2012. This is the highest monthly estimate for gross lending since October 2008.

Gross lending for the second quarter of 2013 was therefore an estimated £42 billion. This represents a 24% increase from the previous three months and is the highest quarterly estimate since Q4 2008.

Commenting on market conditions in this month's Market Commentary, CML chief economist Bob Pannell observes:

"Improvements in the cost and availability of mortgage credit are underpinning a meaningful recovery in the housing market. In recent months, we have seen the strongest performance for mortgage lending since 2008.

"However, although the pace of first-time buyer activity is approaching a quarter of a million per annum, it is worth bearing in mind that this is still barely half of activity rates a decade earlier, and so far below what might be considered normal levels."

Duncan Kreeger, director of secured peer-to-peer lender West One Loans, comments,“Comparisons with October 2008 do nothing to hide the fact that mortgage lending in the UK still has a long way to go. In October 2008 the global economy was in free fall.  The financial crisis had just hit its very peak.  In the US emergency measures were agreed by Congress to prevent economic collapse.  In the UK, Gordon Brown spoke openly about a need to “save the world”.  Stock markets were tumbling.  Millions of people saw their financial future melt in front of their eyes.

“Unwieldy high street banks might never recover the levels of business they saw before the collapse – the largest lenders are still losing market share to new forms of finance.  We expect that to continue and we believe it’s a positive trend.  New financial models will be better for consumers, better for business, and a better way to prevent economic disasters like October 2008.”