The Council of Mortgage Lenders (CML) has estimated that gross mortgage lending totalled £20.7 billion in June.
This is 16% higher than May’s lending total of £17.8 billion, and 3% higher than the £20.1 billion lent in June last year.
This is the highest June figure in eight years when gross lending reached £22.6 billion in 2008.
Gross mortgage lending for the second quarter of 2016 was therefore as estimated £56.1 billion. This is 10% lower than the first quarter of this year, but 8% higher than the second quarter of 2015.
Mohammad Jamei, CML senior economist, said: “The result of the EU referendum is likely to affect the housing market, but there remains considerable uncertainty. Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed.
“But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.
“We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 4 August, given the uncertain outlook that has set in after the vote result.”
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “Mortgage lending is continuing to increase on an annual basis despite uncertainty around the EU referendum, illustrating that peoples’ desire to own a property remained strong in the run up to the vote.
“The outcome of the referendum could cause some prospective buyers to postpone entering the market until the dust has settled, prompting a short-term slowdown in activity. That said, we still expect lending to continue to grow in the coming years, albeit at a more reduced pace due to decreased foreign investment and uncertainty around the future economic landscape following the UK’s decision to leave the EU.”
