British property growth is slowing not evaporating

The UK mortgage market remained ’subdued’ in June, according to the Council of Mortgage Lenders (CML).

Statistics from the group show there were just 18,100 loans to first-time buyers in June, worth £2.3 billion, an eight per cent decline in volume and nine per cent decline in value from May.

According to the CML, the average first time-buyer borrowed 3.33 times their income, down from 3.35 in May, while the average home mover borrowed 2.94 times their income, down from 2.97 in May.

However, the Department for Communities and Local Government (DCLG) has also released new figures showing UK house prices are 0.6 per cent higher than in June 2007, suggesting British property growth is slowing rather than evaporating.

CML head of research Bob Pannell said: “Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand.

“The majority of lending continues to be to people with larger deposits, which is prudent for borrowers and lenders in a slowing housing market.”

The good news from the DCLG was dampened by other government figures showing house prices had fallen in the very short term, down 1.1 per cent in the quarter which ended in June 2008.

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