Gross mortgage lending declines 47%
The Council of Mortgage Lenders (CML) has reported that gross mortgage lending fell to an estimated £12.6 billion in December, down 11% from a month earlier and 47% on December 2007.
The monthly figure is the lowest since April 2001, according to CML records, and the Council’s director general, Michael Coogan, comments that December is typically a quiet month but adds that the market has been constrained by a shortage of funding and reduced demand.
For the whole of 2008, gross lending totalled £256.4 billion, down 30% on 2007 and representing the lowest annual figure since 2002.
In the first half of 2009 lending is expected to decline further, as indicated by figures from the Bank of England showing that mortgage approvals for house purchases fell to 27,000 in November.
The record low represents a 67.1% decline on similar approvals for November 2007.
Meanwhile, remortgaging approvals fell to just 42,000 in November, down from 72,000 in October.
According to Mr Coogan, the package of measures announced by the Government earlier this week to support new lending was an essential and welcome move.
However, he sees the next challenge as settling the detailed requirements for each measure to enable take up by as wide a range of market participants as possible, as soon as possible.