Print friendly version 19 Jun 2008

Lending levels continue to fall

Mortgage lending fell by 2% between May and April, but saw a 19% drop from a high of £31.5bn in May 2007.

Figures released today by the Council of Mortgage Lenders (CML) showed gross mortgage lending totalled £25£5bn in May, down 2% from £26.1bn in April. However, there has been a 19% drop since May 2007, when gross lending hit £31.5bn.

According to the CML, although the monthly lending levels continue to be well below similar figures from last year, they remain at "good" historic levels. It cited recent data from the Bank of England, which showed this pattern will continue in coming months, with lending activity focused mainly on the remortgage market.

But the CML also acknowledged the wide range of mortgage products available from banks and building societies at the moment, despite the credit crunch and funding constraints.

Michael Coogan, the director general of the CML, commented: “The remortgage market remains on track to meet our forecast for growth this year, demonstrating the resilience of the market despite recent bad news. However, by comparison, the next few months will remain very weak for house purchase activity for the funding reasons which are now well rehearsed. We still await first signs of the Bank of England’s Special Liquidity Scheme indirectly helping to ease the current logjam.”

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