Mortgage lending falls to 8-year low

Date:Thursday 19th March 2009
Author: Max Freedman

Mortgage lending in the UK slumped to an eight-year low last month, new figures have revealed.

Produced by the Council of Mortgage Lenders (CML), the statistics show that the gross value of home loans fell to £9.9 billion in February from £11.67 billion in January.

Meanwhile, in February 2008, a total of £25,043 billion was lent in the form of mortgages.

According to the CML, although the figures represent a bigger fall than usually occurs at this time of the year, it is in-line with its forecast of £145 billion gross mortgage lending in 2009.

Responding to the findings, CML director-general Michael Coogan said that government policy is restricting funding for mortgages.

He stated that retail savings, which lenders would use to fund mortgages, are ebbing away to National Savings and Investments.

Mr Coogan added: "Until funding improves, the capacity of lenders to lend will remain constrained."

Recently, the Financial Services Authority released statistics which suggested that the value of new lending fell to £45 billion over the last three months of 2008.