Thursday June 19, 12:53 PM
Rising costs hit mortgage lending
By Lee Wild
LONDON (ShareCast) - Further evidence that the UK housing market is drying up emerged today, with figures revealing a drop in mortgage lending during May and an annual slump of 19%. Gross mortgage lending came in 2% lower at £25.5bn last
month, according to the Council of Mortgage Lenders (CML) and down from £31.5bn in May 2007."The next few months will remain very weak for house purchase activity for the funding reasons which are now well rehearsed," said CML director general Michael Coogan. "We still await first signs of the Bank of England's special liquidity scheme indirectly helping to ease the current logjam." The recent surge in borrowing costs and demands from lenders for bigger deposits have prevented first-time buyers from getting a foot on what is currently a very wobbly ladder. Last week, the CML said the average first-time buyer had to put down a deposit of 13% during April as borrowing dipped to 3.3 times income versus 3.35 a month earlier. It expects UK house prices to fall around 7% this year and property transactions in England and Wales by some 35%.
But Coogan did say the remortgage market remains on track to meet the CML's growth forecast for this year.
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