Gross mortgage lending remains on track

| April 19, 2010 | 0 Comments

Gross mortgage lending leapt to £11.5 billion in March, a 24% rise on February and up 3% on a year earlier, according to the Council of Mortgage Lenders (CML).

However, the figure is in line with the usual seasonal trend and gross lending for the first three months of the year stood at £29.5 billion, or 24% less than in the final three months of 2009.

Last month’s lending also showed a 9% year-on-year decline but nevertheless remains in line with the CML’s forecast of £150 billion in total for 2010.

CML economist Paul Samter comments: “Overall, housing and mortgage activity remains subdued, but is comfortably higher than in the depths of the recession a year ago.”

He adds: “With the gradually improving economic backdrop and interest rates still low, we continue to expect a gentle improvement in market conditions later in the year.”

Looking to the longer term, Mr Samter points that from the beginning of 2011, when the Treasury’s Asset Protection Scheme comes to an end, UK lenders need to replace £300 billion of Government support.

According to the economist, the need to find alternative funding sources is likely limit how much new funding can be made available to the UK housing market.

Meanwhile, Rightmove has today reported that the average asking price for a home rose by 2.6% in April to £235,512.

The monthly increase takes asking prices 6% higher than a year earlier.

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