Gross lending up 5% in March

The Council of Mortgage Lenders has revealed gross lending increased to an estimated £26.3bn in March, up by 5% from £25bn in February.

But the CML says the figure represents a drop of 17% from £31.7bn in March last year.

An increase of around 20% is typically expected between February and March.

Estimated gross lending for Q1 2008 was £77.2bn, down 8% from £83.9bn from Q1 2007.

Michael Coogan, director-general of the CML, says: “Lending on completed transactions is currently running at levels considerably lower than a year ago. But the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening.

“We await the announcement of further action by the Bank of England to respond to these rapidly worsening market conditions. Early action is needed if we are to be able to maintain a market in which UK borrowers continue to be able to access mortgage funds at reasonable prices.”

He adds: “As mortgage costs increase, it remains important for borrowers with potential financial difficulties to speak to their lender as soon as possible, and preferably before they have missed a payment.”