Mortgage lending to worsen

Gross lending increased to an estimated £26.3 billion in March, up by 5% from £25 billion in February and down by 17% from £31.7 billion in March last year, according to the Council of Mortgage Lenders.

An increase of around 20% is typically expected between February and March.

Estimated gross lending for the first quarter of 2008 was £77.2 billion, down 8% from £83.9 billion in the first quarter of 2007.

CML director general, Michael Coogan said: “Lending on completed transactions is currently running at levels considerably lower than a year ago. However, the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening.

“We await the eagerly anticipated announcement of further action by the Bank of England to respond to these rapidly worsening market conditions. Early action is needed if we are to be able to maintain a market in which UK borrowers continue to be able to access mortgage funds at reasonable prices. As mortgage costs increase, it remains important for any borrower with potential financial difficulties to speak to their lender as soon as possible, and preferably before they have missed a payment.”