This dramatic drop in gross lending has been driven by a fall in house purchase. News of the decline comes in the wake of the recent warning by Bank of England governor Mervyn King that house price rises might now have peaked.
So, Mortgage Strategy asks: Are the CML figures indicative of a slowing down of the mortgage market or are they just a temporary blip?
Miles Shipside, Rightmove
The housing market is slowing, there is no doubt of that. The fall in lending detected by the CML is one indicator. Others include the fall in numbers of potential buyers looking for homes, the growth in the stock of properties for sale through estate agents and some easing of prices.
Jim Buckle, assertahome.com
We believe a slowdown is already underway. Our May survey shows that housebuyers and sellers have clearly noticed that interest rates are on the up and that this has begun to dent confidence in the housing market. The latest interest rate increase can only accelerate this trend. The Bank of England should beware overly aggressive interest rate hikes.
Nicholas Leeming, propertyfinder.com
Demand for quality property is stable and we can see no basis for the wilder claims of the doom-mongers who suggest the housing market is about to nosedive. Mortgages are still affordable relative to incomes and should remain so, but we should expect some slowdown in lending as interest rates increase.
Nicola Severn, Mortgage Trust
The fundamentals underpinning the buy-to-let sector are sound. Tenant demand remains strong and professional landlords are still able to buy properties with good yields.
Peter Brodnicki, Mortgage Advice Bureau
There is a slight lending slowdown but this is from record levels, so nothing more than has been expected for a long while. We expect the rest of the year to yield steady lending volumes as the recent rate rises take the heat out of the housing market.