The CML predicts that gross mortgage lending will reach only £145bn next year, compared to £258bn this year and £363bn in 2007.
Robert Sinclair, director at AMI, says: “We are surprised by the CML predictions for lending figures in 2009.
“If the outcomes are as dire as they say then the industry and consumers in particular are in for a tough year. The suggested lending figures are significantly below those predicted by the recent Crosby Review of mortgage finance.”
Sinclair argues the figures demonstrate how urgent it is for the government to implement Sir James Crosby’s idea of guarantees for new mortgage-backed securities.
He adds: “This move would help to ease the future funding of mortgage loans. This now appears absolutely essential if we are to guarantee a reasonable level of lending in 2009. The alternative is that many consumers will be trapped on higher cost loans.”