Euro crisis blamed for 19% gross lending fall

The 19% drop in gross mortgage lending in April has been partly blamed on the eurozone crisis.

Figures out last week from the Council of Mortgage Lenders show gross lending fell from £12.6bn in March to around £10.2bn in April.

The trade body says the sharp decline is likely to have been down to the stampede of first-time buyers who brought forward their transactions in March to beat the end of the Stamp Duty holiday for properties under £250,000.

But it also attributes some of the blame to the eurozone crisis.

Bob Pannell, chief economist at the CML, says: “Eurozone developments are uncertain and have the potential to undermine economic prospects and conditions in our housing and mortgage markets.

“The underlying picture is likely to be one of easing momentum in the housing market, but with potential for a sharper downward correction on bad eurozone news.”

Martin Stewart, director of mortgage brokerage London Money, says the lending fall was certainly influenced by the Stamp Duty holiday.

But he adds: “Few could argue that the demand for property, already weak, has been dealt a further blow by the deterioration of the eurozone. With apocalyptic headlines every day, who wants to commit to a transaction as big as moving house?”