CML Reports Increased Gross Mortgage Lending

The report on gross mortgage lending in September, published by the Council of Mortgage Lenders (CML) on its website on Tuesday, October 20th, reveals that UK homebuyers’ mortgage borrowing from banks, building societies and other lending organisations totalled to £12.5 billion in September 2009. The figure is 2% higher than it was in August, but still it is as much as 25% lower than in September 2008. CML report also showed that mortgage borrowing by UK homeowners in the 3 months to the end of September amounted to £38.9 billion – an 18% increase on the 2nd quarter of the year, yet a 36% decrease against the 3rd quarter of 2008. Despite the fact that both figures – gross mortgage lending by month and by quarter – are lower than they were a year ago, an upward trend in the mortgage market can be seen clearly as borrowing activity is improving every month. The results of the CML survey are also supported by other researches, conducted by such UK organisations as Nationwide Building Society. The lender recently reported a significant increase in UK house prices, which are said to have returned to the level seen in September 2008. The Council of Mortgage Lenders highlighted, however, that the increase in house buying activity has been “balanced” by a decrease in remortgage rates, caused by low competition. Commenting on the results of the survey, Mr. Paul Samter, Council of Mortgage Lenders’ economist, said that house buying and mortgage borrowing activity are at much higher levels than those seen in the beginning of the year; however, the levels remain very low from a historical perspective. He added that the situation is unlikely to change for the better in the short-term as UK mortgage lenders still face significant constraints and economic uncertainty. The good news, according to Mr. Samter, is the improvement in wholesale markets, which occurred in spite of the difficulties on the retail market (i.e. mortgages and savings).