August mortgage lending falls

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by Kay Murchie

The latest figures from the Council of Mortgage Lenders (CML) have revealed a further decline in mortgage lending.

According to the organisation, gross lending totalled £21.8 billion in August, a 12% fall compared with July and a 36% fall from August last year.

The CML said it was the lowest monthly figure since April 2005 and the lowest August figure for 6 years.

Michael Coogan, the CML’s director general, believes that lending will remain low over the next few months and the figures highlight the uncertainty in the present mortgage market for both lenders and consumers.

Lenders are uncertain about future sources of funding and the cost of funding, while consumers are waiting to see if house prices will continue to fall, according to Mr Coogan.

Commenting on the August figures, Andrew Montlake of mortgage brokers Cobalt Capital, said the latest figures from the CML are not surprising but are a reflection of the near standstill the property market now finds itself in.

According to Mr Montlake, traditionally August is a quiet month and it could be a few months before things improve.

Recent house price surveys published by Nationwide and Halifax show that house prices are lower than they were 12 months with both showing price falls of 11%.

Meanwhile, confidence may dwindle even further among consumers after the unexpected takeover of HBOS, the UK’s largest mortgage lender.