Gross mortgage lending slumps 42%

Gross mortgage lending slumps 42%

The Council of Mortgage Lenders (CML) has reported that gross mortgage lending fell to an estimated £17.7 billion in September.

The figure represents a 10% decline on August and is 42% below the level recorded in September of 2007.

While a seasonal fall is to be expected between August and September, £17.7 billion is the lowest gross lending figure since January 2005 and the lowest September figure since 2001.

The CML estimates gross lending for the three months to the end of September at around £62 billion, down 16% on the previous quarter and 37% behind the third quarter of 2007.

The Council’s director general, Michael Coogan, is predicting that weakening consumer demand and ongoing funding constraints will dampen monthly lending figures for the remainder of 2008 and into the first quarter of 2009.

Gross lending for the whole of 2008 is expected to be in the region of £255 billion, down from £363 billion in 2007.

Net lending is forecast to decline to £40 billion in 2008, compared with £108 billion in 2007.

CML members undertake around 98% of all residential mortgage lending in the UK.

The body estimates that there are currently 11.74 million residential mortgages in existence, with a combined value of over £1.2 trillion.

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