U.K. Mortgage Lending Hits Highest Since Lehman Collapse
U.K. mortgage lending rose to the highest since the beginning of the financial crisis last month, adding to signs of a recovery in the property market.
Gross lending increased 12 percent from June to 16.6 billion pounds ($26 billion), the Council of Mortgage Lenders said in a report today. That’s up 29 percent from July 2012 and the highest since October 2008, the month after the collapse of Lehman Brothers Holdings Inc.
A Bank of England program to ease credit conditions and government measures to help homebuyers have boosted demand for property in the past year, pushing up values and raising concerns of overheating. A separate report today from property website Zoopla showed that fewer home sellers are having to discount their asking prices to make a sale.
“First-time buyers are finally getting a look-in due to improved mortgage availability which in turn is lifting the whole market,” said Lawrence Hall of Zoopla. “Banks, sellers and buyers are all more bullish about the state of the economy, which bodes well for the months ahead.”
The proportion of discounted properties for sale has fallen to 32 percent from 37 percent in the past 12 months, while the average price cut has slipped to 6.3 percent from 7.6 percent. London has the lowest proportion of discounts, at 22.8 percent, Zoopla said.
Rightmove Plc said on Aug. 19 that asking prices for U.K. homes have risen 5.5 percent in the past year, with London up 10 percent. It also said more must be done to increase housing supply to prevent a bubble.
Bank of England Governor Mark Carney said on Aug. 7 that policy makers will monitor the housing market and the government’s Help to Buy program “closely.” Still, he added that recent developments must be seen in context and that mortgage applications are “well below historic averages.”
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