- Bob Pannell, CML chief economist
The amount of money lent to borrowers to purchase real estate reached its highest level in eight months in June. The Council of Mortgage Lenders expects that gross mortgage lending reached 17.5 billion pounds in June, 4% higher than May and 17% more than June last year and the highest monthly figure since October 2013. Gross mortgage lending for the three months through June of this year was up 10% from the first quarter, said the CML, and this has risen by 21% from the second quarter of 2013. However, it is expected that the effect of new tighter mortgage lending rules and the possibility of a series of interest rate lift could lead to ma ore subdued lending in the coming months. In June the Bank of England's Financial Policy Committee announced that banks should check that new borrowers could afford their mortgages if interest rates were to increase by 3%. Also, the latest credit data from the Bank of England show the U.K. economy has been rebalancing slowly as the flow of credit to businesses rose in contrast to a negative flow in the previous period. In the quarter to May, lending to Britain's businesses rose by 1.8 billion pounds but remained in the negative territory when compared on an annual basis, the BoE's 'Trends in Lending' data showed. Even the central bank's 'Funding for Lending' scheme failed to spur lending, with net lending to businesses falling 2.7 billion pounds in the first quarter.
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