CML: UK heading for 'seasonal dip'

Published 03rd Sep 2009

Mortgage lenders are warning of a challenging autumn despite a 26 per cent rise in lending in July.

Between June and July total lending rose £16 billion as house sales improved over the month, figures showed today.

The Council of Mortgage Lenders (CML), which compiled the data, warned that house purchases routinely rise in the summer, noting that the figure is still £11 billion lower than the average in July - the lowest since 2001.

"The housing market has continued to improve gradually in recent weeks, as activity picks up further from the lows seen around the turn of the year," said CML economist Paul Samter.

"But, as the Bank of England has pointed out, the economic backdrop remains challenging and the housing market recovery is fragile. We may see a modest dip towards the end of the year as seasonal factors weaken."

The CML said the housing market recovery is likely to be fragile and will continue to be subdued while unemployment is high and banks need to restructure their balance sheets.

The group added that the trend for the remainder of the year would be a "slow but more stable market".

Source: ' TMC '

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