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Mortgage lending in June was 23 per cent higher than in May according to the Council of Mortgage Lenders (CML) amid signs that the tightening in lending criteria since the onset of the credit crunch has come to an end.

Mortgage lending in the three months to the end of June was 50 per cent up on the previous three months.  And while lending between April and June this year was 22 per cent down on the same quarter last year, lending in June was just six per cent lower than the same month last year in a sign that lending appears to be improving gradually. 

The apparent revival in lending, albeit at low levels, seems to coincide with an end to the process by which lenders made it progressively more difficult to obtain a mortgage. The typical first-time buyer deposit, around 25 per cent of the purchase price, and the typical home movers' deposit (31 per cent) have not changed since April.

With demand for property rising and higher mortgage lending, the amount that buyers are borrowing as a multiple of their income has risen marginally.  A typical first-time buyer is now borrowing 3.08 times their income, compared to 3.04 in May, and home movers are typically borrowing 2.76, compared with 2.74 in May.
 
CML economist Paul Samter said: "Low interest rates and realistic selling prices have helped generate a welcome increase in transactions.  But there is some way to go before we reach normal levels of activity.  There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels."