Mortgage lending high as Government figures show fall in number of new homes being built

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UK mortgage lending soars to seven-year high
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A total of £22bn was advanced during July, the highest level since July 2008, according to the Council of Mortgage Lenders (CML). CML said the figure, which was also 9 per cent above lending in June, was in line with its expectations that mortgage advances would strengthen during the second half of 2015, following a subdued start to the year.

Activity in the housing market was subdued in the run up to May’s General Election as potential buyers held back, but it has bounced back following the Conservatory victory.

CML economists forecast that they expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.

Meanwhile, Government figures also released today showed a fall in the number of new build homes being built.

Only 33,280 new properties were started in England during the three months to the end of June, 14 per cent fewer than in the first quarter of the year and 6 per cent down on the same period of 2014.

Within the total, the number of private homes being built dropped by 12 per cent quarter-on-quarter, while housing association starts dived by 23 per cent.

House building levels are now 94 per cent higher than the trough they reached in March 2009, but the recovery still has some way to go, with completions 26 per cent below the peak seen in 2007, before the credit crisis struck.

On a brighter note, the number of properties that were completed increased slightly compared with the beginning of the year, edging up by 4 per cent to 35,640, while they were 22 per cent higher than in the second quarter of 2014.

Only 131,060 new homes have been completed in the 12 months to June, around half the estimated 250,000 properties that need to be built annually to keep pace with demand. The total of 73,580 homes started so far this year means we are on track to fall significantly short of the 250,000 homes a year we need.

"This stock shortfall continues to put an upwards demand on housing and additionally, historic low interest levels and relaxed lending rules continue to provide support to house prices" summerised Naz Resh of Limecube

 

 

 



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