United Kingdom Lending Remains Weak Despite Seasonal Boost

The latest gross mortgage lending estimates for the United Kingdom show that, despite a seasonal boost in the latest month, several underlying weaknesses persist. Gross mortgage lending in June rose an estimated 17% month-to-month to 12.3 billion pounds ($20.3 billion) from 10.5 billion pounds ($17.3 billion) the previous month, according to the Council of Mortgage Lenders, London. However, the June figure represented a 48% decline from 23.8 billion pounds ($39.3 billion) the same month a year ago, and the total estimate for gross mortgage lending between April and June of this year matched the first quarter's £33.3 billion ($54.9 billion). These are the lowest quarterly totals seen since the first quarter of 2001. "The pick-up in June's lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer. But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labor market and limited consumer demand are likely to hold back any significant and underlying improvement," CML economist Paul Samter said.