CML: Mortgage lending falls to lowest level for 30 years

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by Kay Murchie

According to the Council of Mortgage Lenders (CML), mortgage lending to first-time buyers and existing home owners fell during the first 3 months of 2008 to its lowest level for 30 years.

Furthermore, the CML is predicting that the situation will deteriorate throughout the remainder of the year.

Figures from the CML show that mortgage lending from January to March fell to 142,000, just slightly above a total 140,000 noted in the first 3 months of 1975 and below the 146,000 recorded in early 1992 when Britain was in the midst of a recession.

New home loans for first-time buyers and homeowners slumped in March by 48% in comparison to March 2007, said the CML.

On an annual basis, new home loans fell from 89,000 in March 2007 to 46,000.

In addition, the number of mortgages for first-time buyers fell significantly, down 45% in March compared to early 2007.

Commenting on the figures, Michael Coogan of the CML, said house purchase transaction volumes will continue to deteriorate in the coming months as recent approvals data from the Bank of England has shown.

The slump in mortgage lending follows negative news from the Royal Institution of Chartered Surveyors (Rics) who have shown that the proportion of UK surveyors reporting falls in house prices has risen for the ninth consecutive month.

The Rics survey, which shows price falls more widespread than at any time since 1978, is further confirmation that the housing market slowdown is continuing.