Significant Increase In New Loans During June
Since the beginning of this year, there have been steady and noticeable improvements in the number and amount of new secured loans being approved for home purchase, as many industry experts are now starting to talk about “green shoots” of economic and financial recovery.
The situation saw a significant improvement over the course of June this year, as the gross amount of new loans saw an increase of 17 per cent above the figure for May, with total new lending of £12.3 billion compared with just £10.5 billion for the previous month.
The figures come from the Council of Mortgage Lenders (CML), who say that although there has been a healthy improvement in new loan levels during June, this is likely to be a seasonal increase and we are unlikely to see more significant improvement until banks and building societies start to offer loans to borrowers once again at realistic levels.
Overall, the figure for new loans throughout June has dropped by around 48 per cent since the same time last year and although we have seen a jump in new lending last month, the second quarter lending figures are the same as those for the first quarter of this year, at around £33.3 billion.
Paul Samter, economist at the CML commented on the figures, he said “The pick up in June’s lending largely reflects seasonal factors and these may well support lending volumes at moderately higher levels over the rest of the summer. But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement. Our forecast for gross mortgage lending of £145 billion this year is unchanged.”
