Property market still ‘subdued’

The Council of Mortgage Lenders (CML) yesterday revealed that gross lending was an estimated £12.6bn in the month, 1 per cent lower than in June and 6 per cent down on a year ago, the said.

Lending in June picked up to its highest for nearly a year as landlord activity in the buy-to-let market picked up – but July saw lending fall back and the underlying picture of the housing market now “looks stable at best”, the CML said.

The organisation, whose members account for 94 per cent of all residential mortgage lending in the UK, also warned that remortgaging, which has been propping up the housing market, continues to look positive for now but could be disrupted by the eurozone debt crisis, which impacts on wholesale funding markets.

A CML spokesman said: “Housing market conditions remain subdued, but pretty stable. Seasonal factors continue to provide some support, but underlying house purchase activity may drift lower over the coming months.”

Chris Gardner, director of mortgage broker obligo.co.uk, said the figures were encouraging for the economy because consumers were less inclined to take on large debts while those with mortgages were taking advantage of record low interest rates to pay down their borrowings.

He said: “As consumers slowly shed their debt millstones, there’s an outside chance that consumer confidence will improve.”