Mortgage Lending Slips Further
Prospects for a house price recovery were further dampened with announcement of another decline in mortgage lending levels for April 2011. The figures, from industry body the Council of Mortgage Lenders, suggested that lending had fallen by a monthly of 14% in April.
Total lending amounted to £9.8billion, down from £11.4billion in March. This partly represents a seasonal change in lending; however this figure is still 5% down from the £10.3billion lent in April of last year. The housing market in the UK has failed to show any signs of recovery lately, with the most recent Nationwide house price index recording a monthly fall of 0.2% in April.
With this news that residential mortgage providers continue to be reluctant to lend, it is unlikely that the housing market will grow significantly in the near future.
Bob Pannell, CML Chief Economist suggested that the mortgage market is unlikely to change dramatically soon. "Levels of activity look set to remain broadly flat over the near-term,” he said. “It now seems unlikely that interest rates will rise much, if at all, this year and this should help keep the market on an even keel."