Mortgage loans on the rise in July

Mortgage lending to home buyers increased markedly in July, according to the Council of Mortgage Lenders (CML).

The number of loans doled out rose by five per cent when compared with June's figures to 49,500 and also represented a five per cent increase on 12 months ago.

This continued an upward trend in house purchase lending after the expected drop seen in April, which was linked to the end of the stamp duty holiday.

Gross lending totalled £12.7 billion in July, a seven per cent rise from the £11.9 billion in June and a two per cent increase on similar figures in July last year.

Loans to first-time buyers remained at around the same figures as last month, with the total of 19,000 mortgages advanced, down from 19,200 last year.

A slight easing of mortgage rationing meant that first-time buyers only had to put down an average deposit of 19 per cent in July.

This represented the first time in more than three years that this average has been worth less than 20 per cent of the home being purchased.

Mark Harris of mortgage brokers SPF Private Clients told BBC News that the 19 per cent deposit is a lot of money for most first-time buyers to find without the help of parents.

These figures come after Halifax claimed that house prices continued to "tread water" in August with values dropping 0.4 per cent when compared to the previous month.

Remortgage lending also rose slightly in July compared to June, however, this figure was 20 per cent down on the same period last year.

CML director general Paul Smee, commenting on the figures, said: "July's figures show a gradual improvement in the market, with lending approaching the sort of levels we saw at the end of the stamp duty concession. While overall market conditions remain tight, new initiatives such as Funding for Lending and NewBuy have the potential to help lending to continue to ease gradually."

By Amy White