CML: Mortgage lending continues to fall

| December 20, 2010 | 0 Comments
CML: Mortgage lending continues to fall

The Council of Mortgage Lenders (CML) has today reported mortgage lending remained weak in November.

Mortgage lending last month fell by 5% when compared with October, said the Council.

According to the CML, mortgage lending totalled £11.1 billion - lower than October’s £11.6 billion and the weakest monthly amount since April.

CML chief economist Bob Pannell comments: “The fall in gross mortgage lending in November reflects the usual seasonal slowing of activity at this time of year, and reinforces the picture of a continuing flat market.”

However, Mr Pannell explains: “Comparisons with the year earlier are somewhat distorted, as some households brought forward house purchase activity into the closing months of 2009 to take advantage of the stamp duty concession.”

Separately, figures from the Bank of England figures show that just 45,000 mortgages were approved for house purchase last month.

This represents a fall of 26% compared with November 2009.

Today’s figures suggest that the housing market continues to cool and Howard Archer, chief UK economist at IHS Global Insight, believes house prices “will not crash but will trend down gradually to lose around 10% from their peak 2010 levels by the end of 2011.”

Last week, the CML said the housing market will remain subdued in 2011, due to uncertainty surrounding the economy and the ongoing mortgage rationing by lenders.

Over recent times, demand has been weak as many buyers have adopted a “wait and see” approach as uncertainty continues to surround the economy and the Government’s spending cuts make prospective buyers cautious.

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