Mortgage lending remained relatively subdued in July, usually a busy month for mortgages, according to the latest statistics from the Council of Mortgage Lenders.
July saw 56,000 loans for house purchase, worth £8.4billion – a marginal increase on June which saw 52,000, totalling £7.7billion, and up from 53,000 the same time last year, at £7.3billion.
The CML said that while the figures do reflect a traditional rise in mortgage lending for this time of year, the figures "still represent a very weak market".
Remortgage figures remained unchanged from June at 28,000 loans worth £3.5billion, but were down from 40,000 in July 2009.
First time buyer mortgage lending fell to 19,400 in July from 19,700 in June, and from 20,100 in July 2009, despite signs that lenders are starting to welcome first time buyers back to the market, offering higher loan to value deals.
First time buyers' share of the market fell to 34 per cent in July, from 38 per cent in June – the lowest proportion since the credit crunch hit in 2007.
The CML explained that despite easing slightly at the start of the year, lending criteria has now tightened again; the average deposit put down by first time buyers remained unchanged at 24 per cent month-on-month, but had climbed back up from 21 per cent in April and May.
Interest payments continue to swallow up a relatively modest amount of a first time buyer's income, as the base rate continues to be held at 0.5 per cent, with the average, 13.2 per cent, marking the lowest it has been since 2004.
Meanwhile, the number of mortgages for home movers picked up by 13 per cent in July; home movers have seen their average deposits rise but interest payments as a percentage of income have remained steady at 9.6 per cent, the lowest share since the early 1970s.
Commenting on the figures, CML economist Paul Samter said: "The increase in the prevalence of repayment mortgages is likely in part to reflect the anticipation of regulatory changes by the Financial Services Authority to limit the availability of interest-only mortgages.
"More generally, lending criteria remain tight, underpinned by caution on the part of both borrowers and lenders in the light of continuing economic uncertainty."
Ray Boulger, from mortgage adviser John Charcol, said the figures: "provide further confirmation that there has been no follow through to the significant improvement, from a very low base, in the number of housing transactions from the nadir in the first quarter of last year. Current indications are that activity is unlikely to change much over the next few months."
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