February is typically the weakest month for mortgage completions, the CML said and although this was a larger decline than the 3-4% usually experienced between January and February, it was in-line with its forecast of £145billion gross mortgage lending in 2009.
CML director general Michael Coogan said: "Retail savings are now the predominant source of funding for mortgages. But banks and building societies have seen savings ebb away to National Savings and Investments, which has a negative impact on their ability to lend.
"This is yet another example of fractured policy. There are now fewer active lenders in the market, but the Government wants them to lend more. At the same time, the Government’s own savings institution is sucking away the funds that would enable them to do so. Until funding improves, the capacity of lenders to lend will remain constrained."
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