Mortgage lending down as funding challenges persist

| May 21, 2010 | 0 Comments
”Mortgage

Gross mortgage lending fell to an estimated £10.2 billion in April, down 12% from £11.6 billion in March and 1% from £10.3 billion in April 2009.

According to the Council of Mortgage Lenders (CML), a slight seasonal decline had been expected as Easter fell in April this year and gross lending remains broadly in line with the CML’s forecast of £150 billion for 2010 as a whole.

The Council also points out that there have been signs of increased mortgage availability in recent months, with rates on higher loan-to-value deals falling slightly.

However, first-time buyers without large deposits are unlikely to have noticed any improvement and lenders continue to face funding challenges.

The body warns that the imminent fiscal squeeze could slow the housing market recovery, although continued low interest rates could provide support.

The CML’s director general, Michael Coogan, comments: “We welcome signs in the coalition agreement that some housing priorities are on the government’s radar.”

He adds: “But we still do not know how the incoming government plans to address the funding gap looming over the next few years in the mortgage market.”

Yesterday’s suspension of the Home Information Pack (HIP) could also provide a challenge to the UK housing market by prompting a surge in speculative house sellers.

The Royal Institution of Chartered Surveyors recently reported that new instructions are outstripping new buyer interest and the removal of the HIP could see estate agents’ stock levels rise.

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