This represented a 16% increase from the £10.8 billion lent in May but was 3% lower than June 2010. This is the highest monthly total since July last year (£13.3 billion).
Gross lending for the second quarter of 2011 was therefore an estimated £33.5 billion, an 11% increase from the first three months of this year (£30.1 billion) and a 3% decrease from the second quarter of 2010 (£34.4 billion).
Lending in the first half of this year totalled £63.7 billion. This is only slightly below the first six months of 2010 (£64.1 billion).
In today’s market commentary, CML chief economist Bob Pannell observes:
"The UK economy continues to experience disappointing economic growth, strong consumer price pressures, falling disposable incomes and an uncertain jobs market.
"This backdrop weighs negatively on purchase decisions relating to home ownership. By contrast, landlord activity appears to have picked up recently and, with evidence of strong rental demand, this should help to underpin activity over the coming months.
Brian Murphy, head of lending at independent mortgage broker, Mortgage Advice Bureau, said:
"The mortgage market is still down but it is by no means out, as the June figures clearly demonstrate.
"Seasonal factors doubtless played a role in the stronger June figure but there was also very likely a roll-over from April, which was particularly subdued due to the Bank Holidays and Royal Wedding.
"The backlog of people applying for mortgages during May clearly bolstered the number of mortgage advances in June. As the CML rightly observes, the amateur landlord, drawn by the strength of the rentals market, has returned and this will add to activity levels moving forward.
"But the caution of the consumer and the still stringent lending criteria that apply will continue to exert pressure on the mortgage market in at least the short term.
"UK households have made progress in bringing down debt burdens over the past year or so, but this largely stems from the restricted levels of new mortgage lending, unsecured write-offs and nominal income growth. Households in aggregate are not repaying their mortgage debt more quickly.
"Recent emotive headlines on repossession prospects appear overplayed, given that the state of our economy does not warrant large interest rate rises for the foreseeable future. But we do expect to see moderately higher arrears and possessions through the second half and into 2012, as we have previously forecast."
Matt Hutchinson, director of flat and house share website, Spareroom.co.uk, said:
"The number of loans advanced rose in June but is still down on June last year and historically. Mortgage volumes remain very low by historical standards but the question is, will they ever return to their former levels?
"There has been a paradigm shift within the property market. Not only, for many people, is property simply unobtainable due to the size of deposit and impeccable credit history now required, but more fundamentally it no longer holds the attraction it once did.
"For many people, property ownership is increasingly associated with financial risk rather than financial stability — and it's a risk they are less inclined to take.
"The result is an explosion within the rental market, with competition for rental property higher than ever and rents going through the roof.
"While the property ownership market stagnates, the rentals market continues to surge forward. It is no surprise a rise in the number of landlords has been noted."
David Whittaker, managing director of Mortgages For Business comments:
“The buy to let market has been key to underpinning lending activity over the first half of 2011. Professional landlords and investors have taken advantage of stagnant prices, rising rents and substantial yields and this has pushed activity up. Only when owner occupiers are confident of economic conditions and lenders are willing to loosen their criteria further are we to see a substantial recovery in the overall market. But until that moment comes, investors will continue to make hay while the sun shines.”
Richard Sexton, business development director of e.surv, says:
“At the moment, we can only consider this as a flash in the pan. June’s figures reflect a concerted effort from lenders to meet their mid-year lending targets, little more. It would be presumptuous to view this as a grand sign that lenders have a greater capacity to increase lending in the long term. In reality, lenders are stuck between a rock and a hard pace.
On the one hand they have a commitment to improve their capital, while on the other they are under political pressure to increase lending. These competing views are totally irreconcilable. If anything, the next few months are likely to see suppressed activity while lenders recoup equity and nurse balance sheets that still have to juggle a variety of risks. There is also real fear of a domino effect following the inevitable Greek default, with many UK lenders exposed to Western European Banks, who in turn are exposed to PIG countries.”
Paul Hunt, managing director of Phoebus Software said:
“Having weathered a tough year, there are signs that lenders’ liquidity is improving and as a result their confidence has begun to grow. Lenders are pricing their products increasingly competitively, giving borrowers the chance to maximise the benefits of the almost certain continuation of low rates for the rest of this year.
"This has improved mortgage affordability and means lenders c
