Growth in mortgage 
lending slackens off

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The pace of growth in mortgage lending remained subdued in June compared with the start of the year, figures from banks and building societies showed.

Data from the Council of Mortgage Lenders (CML) revealed that an estimated £17.5bn of home loans were handed out last month.

This was an increase on the £16.8bn figure in May and the highest monthly amount since last October. It was 17 per cent ahead of June last year, following a 13 per cent year-on-year rise in May.

But it contrasts with a much more buoyant first four months of 2014, when year-on-year increases of more than 30 per cent were recorded.

CML chief economist Bob Pannell said: “Mortgage lending continues to be well above year-earlier levels, but the pace of growth is certainly softer than earlier in the year.”

Mr Pannell said recent Bank of England measures designed to guard against an overheating housing market could reinforce the effect of the Mortgage Market Review –tougher mortgage lending rules in force since April – in “tipping the UK towards a more conservative lending environment”.

Official figures earlier this week showed annual house price growth running at 10.5 per cent, the strongest pace since May 2010, and the average home costing £262,000.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “There is substantial evidence therefore that housing market activity has – at least temporarily – lost momentum recently.

“This looks to be at least partly due to the introduction of new regulations under the Mortgage Market Review.”