Lending for house purchase and remortgaging both increased in June, according to lenders.

New data from the Council of Mortgage Lenders shows further signs of stabilisation in the mortgage market, but transactions are still weak on a historic basis.

There were 45,000 house purchase loans, worth £5.9 bn, up 23% from 36,500 loans in May. However, this is less than half the average number of loans in June over the last seven years.

-- Advertisement --

The number of loans for remortgage increased by 13% from May to 34,000 loans in June but low interest rates have dampened demand for remortgaging.

There were 17,200 loans to first-time buyers, worth £1.9 bn.

According to the CML the tightening in criteria since the onset of the credit crunch appears to have ended. The typical first-time buyer had a 25% deposit, unchanged since February, with home movers typically borrowing 69% of the property's value.

CML economist Paul Samter said: "Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity.

"There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels."

(GK/KMcA)