Mortgage lending hits seven-year high after general election uncertainty ends

Experts believe many people put their plans on hold to wait for outcome of the election

Updated: 

Mortgage lending hits seven-year high after general election uncertainty

Mortgage lending jumped to a seven-year high last month as home buyers shook off uncertainty around May's general election, according to new figures.

The Council of Mortgage Lenders (CML), which represents major banks and building societies, said mortgages lifted by 29% to an estimated £20.5 billion in June, compared with the month before - marking a 15% rise on a year earlier. This was the highest June total since 2008.

Housing market experts and housebuilding firms believe many people planning to buy or sell a home put their plans on hold while they waited for the outcome of the general election.

Mortgage lending in the second quarter of the year lifted 17% to £52.2 billion compared with the previous quarter, a modest 1% increase on the same period a year ago, according to the CML.

CML economist Mohammad Jamei said: "Activity is picking up after a slow start to the year. Our lending figure for June may be flattered by the end of political uncertainties related to May's general election, and the underlying picture is likely to be one of only modest recovery.

"This should be supported by favourable conditions in the economy, though it will be limited by rising house prices and affordability pressures."

The slow start to the housing market this year led the CML to cut its 2015 forecast for lending by 5% to £209 billion.

The CML added: "Although borrower demand may have softened a little over the past year, it has by no means evaporated. Most parts of the UK continue to report positive house price growth."

It said despite yesterday's first rise in unemployment in more than two years, the fundamentals for the UK economy were strong, underpinned by rising wages and low interest rates.

The CML added that market data pointed to a recovery in housing activity over the near term.

The people who affect house prices

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