CML: Mortgage lending up in March

Permalink: CML: Mortgage lending up in March
by Kay Murchie

Figures released today by the Council of Mortgage Lenders (CML) have revealed that gross mortgage lending rose by 16% last month from February.

According to the CML, a total of £11.5 billion was advanced during March, up from £9.9 billion the previous month.

However, while the rise is positive news for the housing market, lending is still 52% lower when compared with March last year.

Commenting on the CML’s figures, Howard Archer, chief economist at IHS Global Insight, said: “House price activity is beginning to pick up to a limited extent in response to the substantial fall in house prices from their 2007 peak levels and markedly reduced mortgage rates.”

However, the CML cautions that while the figures show signs of stabilising, transactions are still at record lows.

Furthermore, mortgage lenders have cautioned that a recovery in the market soon was unlikely.

The fact that the market is still held back by the lack of mortgage funds is still having a negative impact. Figures show that without a hefty deposit, a mortgage is still hard to come by.

The announcement from the CML follows that from HM Revenue & Customs (HMRC) today, who revealed a rise of 40% in the number of homes sold in March, compared with February.

Meanwhile, a recent poll from the Royal Institution of Chartered Surveyors (Rics) found that housing market activity is picking up after new enquiries increased for the fifth month in a row.

Rics said interest from potential buyers is starting to gain “real momentum” as new buyer enquiries are growing at their fastest pace since September 2003.

With regard to house prices, Halifax and the Nationwide say prices have lost around 20% of their value since their high of summer 2007.

However, some experts still believe that prices will fall by a further fifth bottoming out at the end of this year.