Gross lending in July totalled £25.2 billion, 2per cent lower than in June, according to the latest data from the CML. This figure is 13 per cent lower than the £29 billion of gross lending in July 2004.
Lending for house purchase decreased slightly in July to £11.8 billion, from £12 billion in June. This figure is 19 per cent lower than the £14,600 billion this time last year. The proportion of mortgage lending for house purchase remained static in July at 47per cent and the proportion of loans going to first-time buyers and movers also remained the same, at 29 per cent and 71 per cent respectively.
Remortgaging saw a slight increase (£200 million) to £10.3 billion. Remortgaging as a proportion of total lending also increased to 41per cent from 39 per cent in June.
The average pricing of fixed-rate products declined for the ninth consecutive month to 5.31per cent from 5.36 per cent in June. As a proportion of all loans, fixed-rate products increased to 50 per cent from 47 per cent last month, the highest proportion since December 1998. The pricing of variable-rate products fell for the seventh consecutive month to 5.68 per cent from 5.76 per cent a month earlier. Variable-rate products as a proportion of loans also fell to 49 per cent from 53 per cent in June.
Commenting on the latest figures, CML director-general Michael Coogan, said: "Today's figures indicate that the housing market has started to stabilise at a new lower level last seen in 2003. The recent 0.25 per cent cut in interest rates by the Bank of England should help ensure that this stability continues over the coming months by giving a much needed boost to consumer confidence about future interest rates. Our recently published forecasts predict a steady housing market in the next couple of years, and so we expect to see similar levels of lending in the coming months."
