Mortgage lending falls to £12.6billion in August

Estimated gross lending in the month was 37% lower than last August’s total of £19.9billion.

Despite the seasonal decline in activity, underlying lending levels appear to have stabilised during the summer, with stronger lending for house purchase balanced by lower levels of remortgaging. This trend is unlikely to change for the rest of this year, with a pick-up in housing market activity checked by continuing funding constraints and a lack of ability or incentive to remortgage.

In the CML monthly market commentary CML economist Paul Samter said: "The likelihood of a significant pick-up in lending remains weak, but the prospects for wholesale funding markets are improving. This could result in a gradual easing in constraints on the supply of funding over time. However, demand from consumers and a prudent approach to lending criteria are likely to mean that the market remains subdued."

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0 thoughts on “Mortgage lending falls to £12.6billion in August

  1. David Brown, LSL Property Services

    “After three consecutive months of increases in mortgage lending, this sharp fall looks like a dousing of cold water on the housing market. On further inspection, however, it is not so bad. The downturn is in part seasonal, and the reduction since last year reflects much lower levels of remortgaging. There are tentative signs of improvement in lending for home purchase. But lenders still need to improve the availability of mortgages to both home purchasers and investors, to help kick start the housing market. Many prospective first time buyers continue to rent, increasing pressure on the private rented sector. This may present a window of opportunity for cash-rich investors in the buy-to-let market.”