Gross Loan Lending Continues To Decrease
The recent trend in the housing and home loan market appears to still be continuing at a pace, with gross figures on new loans decreasing once again.
According to the latest figures from the Council of Mortgage Lenders (CML), the total lending figure for the month of June was approximately £23.8 billion, which although may sound like quite a lot, is down on the month of May by 3% and has fallen by almost one third from the same period for last year.
There has also been a decrease in new loans between the first and second quarters of the year and although this is only slight, with a drop of 1% overall, historically we have seen an increase from first to second quarter lending as there is usually an increase in house purchase activity in the springtime, once the clocks change.
When we compare the first and second quarter of this year against the same period for last year however, there has been a notable increase in the rate of slowdown year on year. The reduction in new loans for the first quarter of this year was down by 11% on last year, whereas there was a difference of 21% over the second quarter.
These figures highlight both a lack of consumer confidence in the housing market at present and also the difficulties being faced by lenders who are still suffering from the credit crunch and it could be some time before we see things start to turn around.
Michael Coogan of the Council of Mortgage Lenders said “Market activity during a traditionally busy time of year for mortgages has been muted by funding shortages and, more recently, dampened consumer demand. While by historic comparisons, we still have a good level of gross lending, new net lending has been constrained in 2008 and this picture will continue for the rest of the year.”
