House market slips back again after fleeting revival

A MINI revival in the mortgage market fell away during July, amid a "subdued" property market, according to the UK's major lenders.

Gross lending was an estimated 12.6 billion in the month, 1 per cent lower than in June and 6 per cent down on a year ago, the Council of Mortgage Lenders (CML) said.

Lending in June picked up to its highest level 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, warned that remortgaging, which has been propping up the housing market, continued to look positive for now but could be disrupted by the eurozone debt crisis, which impacts on wholesale funding markets.

CML chief economist Bob Pannell 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."

Richard Sexton, director of e.surv chartered surveyors, said: "July's subdued figures confirm that June was just a fleeting uptick.

"The banks are handcuffed by weak economic growth and concerns over their capital liquidity."

He added that banks were targeting borrowers with large deposits, while people seeking mortgages with large loan-to-value ratios were being offered more restrictive rates.