By Ilona Billington
LONDON--Gross mortgage lending in July surged to an almost
five-year high, a survey showed Tuesday, suggesting government
stimulus packages are boosting housing market activity.
The Council of Mortgage Lenders said it estimated gross mortgage
lending in July was 16.6 billion pounds ($26 billion). That's the
highest level since October 2008, up 12% from June's GBP14.8
billion total and 29% higher than the GBP12.9 billion gross
mortgage lending total reported in July 2012.
"An improvement in sentiment and activity continues to show in
the U.K. housing and mortgage markets, with a more positive picture
also starting to emerge in the economy," said CML market and data
analyst Caroline Purdey. "Our forward estimate of gross mortgage
lending in July reinforces a growing evidence base of a
strengthening in the housing and mortgage markets."
The further rise in gross mortgage lending--which measures all
agreed mortgages without taking monthly mortgage repayments into
account--is in line with the latest run of housing market data.
The average asking price for a home has risen GBP20,000 so far
this year, according to online estate agency Rightmove, while
growing demand for property, in part thanks to the government's
Funding for Lending Scheme and Help to Buy have helped to boost
U.K. house builders' profits and performance.
The FLS is helping to increase the availability and cut the cost
of mortgages, while the first phase of Help to Buy opened for
business in April and provides first-time buyers of newly built
homes an equity loan of up to 20% of the value of the property.
-Write to Ilona Billington at ilona.billingtojn@wsj.com