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Mortgages -
CML finds mortgage decline - 20/12/2007
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Gross mortgage lending in the UK declined by eight per cent last month to hit £30.7 billion, the Council of Mortgage Lenders (CML) announced today.
This figure also represents an eight per cent drop from November 2006's figure - the first time that such a year-on-year decline has been registered since July 2005.
The CML's announcement represents further evidence that UK consumers are becoming less willing to borrow due to the ongoing credit crunch - and could provide a further indicator of general economic slowdown.
Fears of a stuttering housing market were partially behind the Bank of England's decision to cut interest rates by 0.25 per cent last week.
Commenting on the report, director general of CML Michael Coogan said: "As we had forecast, lending in November dipped below its 2006 - equivalent for the first time this year and we expect this trend to continue into 2008.
"We welcome the recent initiative by the Bank of England with other central banks to inject liquidity: this support needs to continue, and be increased, in the coming months."
Despite the new report's evidence for a decline, Mr Coogan struck an upbeat note for the future of the mortgage industry in his statement - adding that the lending slowdown was due to a lack of funding rather than a lack of consumer demand.
In other words, when the credit crunch loosens its grip, the CML believes that the market will become buoyant once more.
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