Mortgage lending soars in June, says CML

The amount of money being borrowed by homeowners last month soared to its highest June level for eight years, according to estimates.

22 August 2016

The amount of money being borrowed by homeowners last month soared to its highest June level for eight years, according to estimates.

Total loan advances reached £20.7bn, the Council of Mortgage Lenders (CML) said.

That was 16% higher than the previous month, and 3% more than in the same month last year.

The number of homes sold rose by 4.9% during the month, according to separate figures from HM Revenue and Customs.

The figures reflect the run-up to the EU referendum on June 23, and suggest that homebuyers did not necessarily sit on the sidelines waiting for the result of the vote.

However higher mortgage lending also reflects higher house prices, which are still rising at 8.4% a year, according to the Halifax.

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Nevertheless the CML said lending activity was likely to quieten down over the next few months.

"Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases," said the CML's senior economist Mohammad Jamei.

House price chart

The amount of money lent out in June was still well below the £26.1bn lent out in March, when there was a rush to buy.

A 3% surcharge on stamp duty began in April, which affected landlords and anyone who owns more than one property.

In its figures, HMRC said that in total there were 94,500 houses or flats sold during June.

Although that was more than in May, it was 10.2% lower than in June last year.