Mortgage lending boost in July
Mortgage lending in July is estimated at £23bn, said UK Finance, above the average lending figures seen over the past year.
First-time buyer and remortgage borrowing from homeowners has boosted lending for some time, said the trade body, but it predicted the pace of growth will slow, because of a potentially challenging economic outlook.
Eric Leenders, head of personal at UK Finance, said: “Steady levels of mortgage activity seen through the first half of the year continued into July. First-time buyer numbers continue to be strong, helped in part by government schemes. But that has been offset by home movers, where a shortage of homes on the market is limiting their activity.”
Flat housing market
Despite the July rise, housing market activity has been flat since the start of 2017, with lending and transactions both in line with 12 month averages.
UK Finance noted that economic growth in the first half of 2017 has been slower compared with the average rate during the second half of last year. This is expected to continue over the short-term and, because the economy and the housing market are closely linked, it suggested this could cause a slowdown in the housing market.
The trade body admitted that ‘if economic conditions soften further, then a slowdown in activity would be very likely’.