Mortgage lending declines in February

Posted 2008-03-24

Gross lending figures for home purchases fell by six per cent from £25.6 billion in January to £24 billion last month, new figures have revealed. Subdued levels of home purchase applications are believed to be responsible for the downtick, with re-mortgage approvals remaining strong and confounding expectations of a wider crash. But the Council of Mortgage Lenders (CML) nonetheless cautioned that fluctuations in the housing market are set to become a staple feature of UK property, adding that ongoing funding difficulties look set to keep the pressure on prospective homeowners. "We have entered a substantially slower phase in the housing market and there will be ongoing problems in the mortgage funding markets unless the Bank of England makes new, broader based attempts to improve levels of liquidity in the UK," commented CML director Michael Coogan. He added: "Demand for mortgages remains strong but cannot be fully met from existing funding. This has led many lenders to reduce their product ranges, increase their mortgage prices and, in some cases, to reduce their lending capacity." There are presently 11.8 million mortgages in the UK, totalling loans worth in excess of £1.1 trillion.

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