Mortgage Lending Level Increases as Housing Market Summer Boom Begins
The housing market is likely in the midst of a growing boom to the market. It will be weeks before the data is analyzed and reported, but experts say the summer and early autumn will see the average house price grow much like it did last year. The increase in housing costs will block more people from being able to afford to climb onto the property ladder. It will also mean that without first time buyers coming into the market that home owners looking to upgrade will have few buyers to attract for a possible sale.
May figures in mortgage lending showed a subdued demand which was in line with the figures reported for home sales. There was however, more interest shown through an increase of visitors to home listing sites online.
Demand was expected to increase in June and the Council of Mortgage Lenders (CML) revealed that data revealed a 15% increase in a year to year comparison with June 2014. There was a lending value of £20.5 billion which is an increase over the £17.8 billion recorded for June of last year. In a month to month comparison, mortgage lending increase by 29% over May’s level of £15.8 billion.
Quarterly gross lending rose to £52.2 billion which is an increase of 17% over the previous quarter’s lending level of £44.5 billion. In a comparison to the same quarter last year there was a 1% increase.
Despite the data revealing a waking up of the market, due to possible rising house prices mortgage lending may slow down in terms of volume as availability issues rise. The supply of new property listings is still low and competitive buyers will be pressing house prices upward. Perhaps the important factors that could keep buyers coming to the housing market are low interest rates offered by lenders and continued strong confidence in the economy.