Gross mortgage lending rose from £14.8bn in June to £15.5bn in July, according to the latest monthly survey of mortgage lenders from the CML and DETR.
Lending for house purchases remained stable at £9.6bn in July, the same figure as June, but dropped 3% to 62% of the total lending figure. Remortgage business regained May’s position of 31% of the total after a slide to 29% in June. The value of remortgaging rose to £4.8bn in July, from £4.3bn in June.
Average new mortgage rates remained stable at 5.59% for both June and July. Average new variable rates fell from 5.3% in June to 5.29% for July, while average new fixed rates dropped from June’s 5.9% to 5.87% in July.
Michael Coogan, director general of the CML, said: ‘Levels of mortgage lending in July continued to beat their previous records, but lending is likely to slow down as we move into next year. We expect house prices to continue rising but anticipate the rise will become more sluggish following this year’s unexpectedly strong growth.’
At the same time, the CML issued revised housing market forecasts anticipating a slowdown in house price inflation and lending growth next year. The number of property transactions is forecast to fall from 1.41m this year to 1.38m next year, with a corresponding fall in mortgage lending from £139bn this year to £135bn in 2002.