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 18 May 2008 00:12 BST

Mortgage lending increases slightly in March

Friday, 18 Apr 2008 10:14
Mortgage lending figures up slightly in March

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Gross mortgage lending increased to an estimated £26.3 billion in March - up five per cent from the figure of £25 billion recorded in February.

According to the latest statistics from the Council of Mortgage Lenders (CML), the rise represents signs of a recovery – although the level represents a fall of 17 per cent from the £31.7 billion lent in March last year.

Furthermore, the CML would normally expect a 20 per cent increase in lending between February and March, and thus such a moderate increase suggests the market is still in decline.

"Lending on completed transactions is currently running at levels considerably lower than a year ago," said CML director general, Michael Coogan.

"However, the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening."

Estimated gross lending for the first quarter of 2008 was £77.2 billion, down eight per cent from £83.9 billion in the first quarter of 2007.

"We await the eagerly anticipated announcement of further action by the Bank of England to respond to these rapidly worsening market conditions," continued Mr Coogan.

Speculation has been growing this week the Bank of England has been working on a scheme to allow lenders to swap their mortgage-based assets for government bonds, with an announcement expected next week.

"Early action is needed if we are to be able to maintain a market in which UK borrowers continue to be able to access mortgage funds at reasonable prices," explained Mr Coogan.

"As mortgage costs increase, it remains important for any borrower with potential financial difficulties to speak to their lender as soon as possible, and preferably before they have missed a payment."End of story

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