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Gross mortgage lending 'at highest level in 8 months'

New figures reveal gross mortgage lending in June reached its highest level since October 2013.The Council of Mortgage Lenders (CML) has published data showing that gross lending hit £17.4 billion last month, up four per cent on May's figure and 17 per cent higher than the level recorded in June last year.During the second quarter of 2014, gross mortgage lending was an estimated £50.8 billion, representing a ten per cent increase on the first three months of this year and a 21 per cent increase on the second quarter of 2013.The CML said a more conservative lending environment could prevail in the UK as a result of the macro-prudential regulations announced by the Bank of England's (BoE) Financial Policy Committee (FPC) in late June.New measures announced by the FPC include affordability tests to ensure borrowers are able to cope with a three percentage point rise in interest rates over five years from the date of a loan's issue.In addition, a 15 per cent limit has been imposed on the proportion of new mortgages with loan to income multiples at or above 4.5 times.CML chief economist Bob Pannell said: "The macro-prudential interventions announced by the FPC in late June are finely calibrated and precautionary, but could nevertheless reinforce April's Mortgage Market Review in tipping the UK towards a more conservative lending environment.Mr Pannell added that it is hard to predict the short-term direction for house buying activity and mortgage lending "given unknown regulatory impacts and uncertainty as to when the first in a series of interest rate increases will take place".The CML notes that the BoE appears to be unconcerned by current housing market developments and anticipates further recovery in mortgage lending, housing market transactions and house prices through to at least 2016. Some modest short-term impacts could result from the FPC's decisions, the CML says, and these could reinforce the more conservative risk appetite engendered by MMR rules, with the biggest impact likely to be felt in the London market. 

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