Mortgage lending falls 32%

Mortgage lending slumped by more than a third in the year to June as house price growth slowed, latest reports show.

The Council of Mortgage Lenders (CML) has revealed today (August 12th) that mortgage lending in June fell to £23.6 billion, which is down four per cent on May's figure.

Figures also show that the value of home loans to first-time buyers fell by nine per cent to £2.3 billion, meaning that more are choosing to stick to renting homes in London rather than buy.

This is supported by the fact that the average number of property sales handled by surveyors across the country fell to only 14.4, according to the Royal Institution of Chartered Surveyors.

Average levels of deposits are now at an all-time high, with the average homeowner being required to put a 22 per cent deposit on a new property, up from 20 per cent in May.

"Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand," said Bob Pannell, head of research at CML.

He went on to say that the majority of lending continues to be to people with larger deposits, which means that people are unable to get on to the property ladder and are continuing to rent.

Published 12th August, 2008

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