CML could lower its lending forecast
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The Council of Mortgage Lenders has warned that it may look to lower its mortgage lending forecast for the year after seeing lending figures this morning from the Bank of England.
Michael Coogan, director general of the CML, says it is predicting gross lending of £150bn this year - and net lending of £15bn - but it is keeping its forecasts under review as it is tracking below these levels to date.
He says: “Now that we have seen mortgage approvals data for the first four months of this year, it is becoming clearer that the risks associated with our lending forecast for 2010 are on the downside.
“So far this year, house purchase activity has been lower than in the last half of 2009, although this reflects the Stamp Duty holiday, which boosted activity towards the end of last year and caused the quiet start to 2010.
“Meanwhile, although lower interest rates are benefitting borrowers, they are removing the incentive to remortgage, which is also bearing down on the lending figures.
“The data is likely to reflect both the continuing shortage of mortgage funding and weak consumer confidence, and therefore demand. The forthcoming Budget represents an opportunity for the government to prioritise support for home-owners, although we recognise the fiscal position leaves only limited room for manoeuvre. We will update our forecasts later in the summer.”
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