Gross mortgage lending drops 14% in April

20 May 2011 | By Natalie Thomas

The trade body says a slight seasonal decline was expected as Easter fell in April this year. Coupled with the extra bank holiday for the royal wedding, the CML says it is difficult to gauge underlying trends with any certainty.

Bob Pannell, chief economist at the CML, says: “Statistical noise, associated with extended holidays around Easter and the royal wedding, makes it harder to read the immediate market situation.

“This represents an unfortunate temporary loss of signal, at a time when it would be useful to gauge the resilience of house purchase demand to economic uncertainties and the pressure on household incomes.”

Pannell says levels of activity look set to remain broadly flat over the near-term and it now seems unlikely that interest rates will rise much, if at all, this year and this should help keep the market on an even keel.

Brian Murphy, head of lending at the Mortgage Advice Bureau, says before the country packed up and went on an extended break, mortgage activity in the earlier part of April was actually running at February and March levels. But then it went off a cliff.

He says: “In May to date, activity has picked back up and is running at the levels seen in March and the first half of April.

“In the past fortnight, we have seen an extraordinary period of repricing among lenders, who are vying with each other to attract new business.

“This is good news for buyers and there are some very competitive rates coming out, even at higher LTVs.”

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