Gross mortgage lending declined 8 per cent to £10.5bn in February, according to figures released by the Council of Mortgage Lenders today.
Although the latest figure is 1 per cent higher than the £10.4bn recorded for February 2012, gross lending was down on the £11.4bn recorded for the previous month.
In fact, February’s gross lending figure was actually the lowest monthly total since April 2012 when it stood at £9.9bn.
CML chief economist Bob Pannell says: “There continue to be signs of improvement in activity and sentiment in the housing and mortgage market sector, despite headwinds from a challenging economic backdrop. With relatively strong house purchase numbers and subdued remortgage activity, the underlying position does not appear to have changed much over recent months.
“Further policy intervention in the housing market is expected in today’s Budget and if so, it is important that any policy objectives are clearly articulated.”
E.surv director Richard Sexton says: “Despite improving market sentiment, tight credit conditions are having a debilitating effect on the mortgage market. They have damaged lending levels – particularly to first-time buyers – and impaired banks’ ability to increase lending with any real significance. Despite lower rates than ever, and over 300 new high LTV mortgages, buying a house remains a pipe dream for most. Would-be borrowers are consolidating and paying-off their debts, rather than buying property. Pessimism about the economic future is plaguing the mortgage market– let’s hope the Chancellor anticipated this continued trend and has plans to help the sector in today’s budget.”
Hometrack strategy, risk and economics director Gary Styles says the figures are not an accurate representation of current state of the market.
He says: “If you work out the seasonal adjusted monthly data these figures imply a flat picture February compared to January. The CML needs to seasonally adjust its gross lending data.”