Subdued market will continue

Today’s Bank of England lending data for June confirms that a quiet mortgage market is set to remain into the autumn.

The gross lending figure (not seasonally adjusted) was £12.9 billion in the month, a little lower than the CML’s earlier estimate of £13.1 billion. And the number of approvals for both house purchase and remortgaging were lower than in June last year.

CML economist Paul Samter commented: “The number of loans approved for house purchase fell by 4% on a seasonally adjusted basis from 49,641 in May to 47,643 in June and was down 6% on a year ago.

“This is the first time the annual rate has turned negative since April last year, but it is likely to remain so in future months as comparison is made with a rather stronger market towards the end of last year.

“Remortgaging activity remains at exceptionally subdued levels – with 24,949 approvals in the month, down 3% from May and consistent with refinancing activity remaining at a decade long low.

“This low demand is being driven both by the lack of demand among those existing borrowers enjoying low rates, and tighter criteria that may be constraining those borrowers who do wish to remortgage.”