Mortgage lending ‘increases in month but down year-on-year’ Mortgage lending increased by 16% from May last month, up to £12.9 billion, according to figures from the Council of Mortgage Lenders (CML).

But the figures was still 3% lower than June last year, as was lending for the first six months of 2011.Total mortgage lending was £63.7 billion from January to June, a slight drop year-on-year, the CML said.It attributes the drop to the economic state, as well as pressures on households such as high inflation, energy bills and taxes.Bob Pannell, Chief Economist at the CML, said: “The UK economy continues to experience disappointing economic growth, strong consumer price pressures, falling disposable incomes and an uncertain jobs market.”Recent emotive headlines on repossession prospects appear overplayed, given that the state of our economy does not warrant large interest rate rises for the foreseeable future.”He added that the CML predicts ‘moderate’ increases in arrears and repossessions in the second half of 2011.Competitiveness between mortgage lenders may be set to increase after Barclays unveiled the lowest ever fixed-rate mortgage this week, reducing the interest rates by 0.50% on some products.

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