Mortgage lending jumped to a seven-year high last month as home buyers shook off uncertainty around May’s general election, according to new figures.
The Council of Mortgage Lenders (CML), which represents major banks and building societies, said mortgages lifted by 29 per cent to an estimated £20.5 billion in June, compared with the month before - marking a 15 per cent rise on a year earlier. This was the highest June total since 2008.
Housing market experts and housebuilding firms believe many people planning to buy or sell a home put their plans on hold while they waited for the outcome of the general election.
Mortgage lending in the second quarter of the year lifted 17 per cent to £52.2bn compared with the previous quarter, a modest one per cent rise on the same period a year ago, according to the CML.
CML economist Mohammad Jamei said: “Activity is picking up after a slow start to the year. Our lending figure for June may be flattered by the end of political uncertainties related to May’s general election, and the underlying picture is likely to be one of only modest recovery.
“This should be supported by favourable conditions in the economy, though it will be limited by rising house prices and affordability pressures.”
The slow start to the housing market this year led the CML to cut its 2015 forecast for lending by five per cent to £209bn.
“Although borrower demand may have softened a little over the past year, it has by no means evaporated,” it said. “Most parts of the UK continue to report positive house price growth.”