CML: Gross mortgage lending falls in April

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by Kay Murchie

The Council of Mortgage Lenders (CML) have revealed today that gross mortgage lending fell in April to £10.4 billion, down from £11.4 billion the previous month and down from £26.1 billion in April last year.

However, there is a slight fall for seasonal reasons as Easter fell in April this year (Easter was in March in 2008). Taken together, lending for March and April is down 57% on a year earlier.

Commenting on the figures, the CML’s director general Michael Coogan, said: “It’s still too early to spot a clear pattern of recovery in the housing market as some commentators have suggested.”

“Activity remains weak, and we have said we will see volatility in monthly lending figures as we bounce along at the bottom of the market,” added Mr Coogan.

While the fall in lending is seen as a disappointment, there have been some positive signs of late in the housing market.

Earlier this week, the National Association of Estate Agents (NAEA) reported that property sales in April were at their highest since October 2007.

According to the NAEA, the average estate agent sold 10 properties last month, up from 8 the previous month and a record low of 5 last August.

According to Peter Bolton King, chief executive of the National Association of Estate Agents, confidence is returning to the market.

Furthermore, the Royal Institution of Chartered Surveyors last week said that new buyer enquiries continued to rise in April - the sixth consecutive monthly rise and the fastest pace since August 1999.

However, despite the improvement in sales and enquiries, the Nationwide and the Halifax are still reporting that house prices are falling.

Furthermore, first-time buyers are still unable to get onto the property ladder unless they have a significant deposit.

However, this could change with the news that Lloyds TSB has launched the “Lend a Hand” mortgage with first-time buyers in mind. The three-year fix comes at a rate of 4.39%, with a loan-to-value ratio of 95% and a £995 fee.

However, applicants will need to be on good terms with their nearest and dearest because the offer is subject to the bank taking a legal charge on a savings account belonging to the borrower’s parents, grandparents or friends.