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Written by rosalind renshaw

Mortgage activity plummeted in June, says the Mortgage Advice Bureau.

The number of mortgage applications for house purchase fell by 19.4% on May’s figures, while remortgage applications tumbled by 30.5%.

MAB only releases data to do with applications, not approvals – however, approvals data from the Council of Mortgage Lenders yesterday confirms the picture.

The CML estimates that gross mortgage lending in June totalled £11.9bn, a 5% fall both from the previous month (£12.5bn) and from June 2011 (£12.6bn).

If the estimate is correct, it will have been the weakest June for a decade.  
Lending in the first half of this year totalled £67.9bn. Despite June’s drop, this is 7% higher than the first six months of 2011 (£63.7bn).

However, June’s fall comes with a market activity report from e-surv, part of LSL Property Services, which pointed to a near-record low for housing transactions in June.
CML chief economist Bob Pannell said: “Mortgage lending has experienced something of a see-saw pattern over recent months, largely reflecting the short-term spike and subsequent trough in house purchase activity associated with the ending of the Stamp Duty concession for first-time buyers in late March.

“Weaker mortgage lending in June points to a more subdued tone for the housing market in line with that for the wider economy.”

Using data from more than 500 brokers and 800 estate agents, the Mortgage Advice Bureau says average deposits on purchase applications has risen, reaching £66,512 in June from £56,167 – an increase of 18.4% – and rates have increased again, reaching 4.72% for the average two-year fixed rate mortgage – up from 4.27% in January.
Brian Murphy, head of lending at MAB, said: “The June figures are down for the year, having peaked just a month before, and we expect this volatility to continue for the rest of the year.

“This suggests fewer people are able to secure mortgage finance, especially at the bottom end of the market.
“If we are to see a return to growth we need to see more flexibility and more good-quality borrowers getting access to mortgage funding.

“The impact of moving back into recession has made borrowers nervous and the weather has also played its part, but more needs to be done to help kick-start the property market.
“There is much pent-up demand from borrowers, and while we believe the ‘funding for lending’ scheme could have a positive impact, it needs lenders to take up the proposal, and they will first want to be comfortable there is no stigma attached with doing so.”


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    Nat West have just done it to us. No current warning whatsoever. If they melt down today it's not soon enough!

    • 17 August 2012 11:04 AM
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    The figures just out would suggest the CML are right!

    • 24 July 2012 21:52 PM
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    Rebel, I am afraid the bankers are the ones with the bat!

    • 23 July 2012 10:37 AM
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    @realising reality

    its true...the 1990s 'slump' was actually driven by agents who were desperate for sales because of no sale no fee

    too many agents have vested interest in high prices and cannot bear to slash prices

    many are zombie agents supported by banks with huge overdrafts and no assets where pulling the plug would mean banks never get their money back

    • 21 July 2012 07:30 AM
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    Oh dear RR, I can't work out if you are really, really, really stupid or actually believe yourself?

    • 20 July 2012 16:18 PM
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    I've said it before...The scene from The Untouchables - you get all the bankers in round a table, if they don't promise to lend to consumers, they get the baseball bat.

    It's not complicated.

    • 20 July 2012 09:42 AM
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    I can see from reading "UK faces prolonged house market slump, warns IMF", that the comments are nervy about the current situation because many don't really know what to do about it.

    Carefully crafted checks and balances need to be implemented to get the housing market, which is a vital part of the growth of our economy, viable once again.
    As far as house values are concerned:
    At the right (or market) price, sellers can always sell and buyers can always buy.

    Therefore, all that is required to get the UK housing market moving again, is to find a reliable method for measuring the right price for each property to be marketed.

    Who amongst the readership is prepared to admit, without disclosing their identities, if they prefer not to, that they are not currently doing this for whatever reasons?

    • 20 July 2012 08:56 AM
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