CML figures show 23% more home loans in June

The number of mortgages granted in June was up 23% from the month before, new data from the Council of Mortgage Lenders (CML) shows.

The trade body says there were 45,000 house purchase loans granted in June, up from 36,500 in May.

But, this is still less than half the average number of loans recorded in June over the last seven years.

Between April and June, 116,700 house purchase loans were advanced by lenders, a 50% increase from the three months before, but down 22% from the same period last year.

The number of remortgage loans also rose month on month, up 13% to 34,000 in June.

However, low interest rates dampened the overall demand for remortgaging in Q2 with 96,000 loans advanced, a 21% fall from 122,000 in Q1 2009.

Fixed rate deals increased in take-up throughout Q2 accounting for 78% of new lending in June - the largest share since June 2007.

Loans to first-time buyers and home movers were also higher than May but down from June 2008.

There were 17,200 loans to first-time buyers worth £1.9bn, up from 13,700 loans in May but below the figure of 18,400 in June last year.

Home movers accounted for 27,800 loans worth a total of £4bn, up from 22,700 in May but down from 29,500 in June last year.

The CML figures also show home movers typically borrowed 69% of the value of a property in June, unchanged from April and the typical first-time buyer had a 25% deposit, unchanged since February.

Income multiples have also started to increase, with the typical first-time buyer borrowing 3.08 times their income, compared to 3.04 in May, and home movers borrowing 2.76 times their salary, compared with 2.74 in May.

CML economist Paul Samter says there are tentative signs lending criteria is easing.

"Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity," he says.