Mortgage lending approvals likely to fall further

Posted 2008-04-28

Following the release of the Bank of Englands (BoE) mortgage approvals data, the Council of Mortgage Lenders (CML) believes that the number of mortgages agreed will continue to fall.

The Banks figures show that the number of approved mortgages fell from 72,000 in February to 64,000 in March.

In response, the CML has conceded that conditions will get worse before they get better, citing the fact that the BoEs Special Liquidity scheme, which injected £50 million into the financial markets, is not designed to revitalise the mortgage market.

"We hope that some of the liquidity will be recycled down into the mortgage market. But it will take some months for this to happen and mortgage lending volumes are going to continue to fall before they improve because of the funding gap of the funding gap of around £30 billion," it said in a statement.

The number of agreed mortgages was the lowest since records began in 1999 and was a 44 per cent reduction on the same month last year.

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