RICS: CML January mortgage lending

Commenting on the RICS CML mortgage lending data, Simon Rubinsohn, RICS chief economist said: "The drop in new home loans highlighted in the CML data clearly demonstrates the fundamental problem in the mortgage market at the present time. Buyer enquiries have risen for four successive months according to RICS data but there has been little follow through on aggregate lending. Part of the problem is simply the withdrawal of overseas and some smaller lenders from the marketplace. But the commitment to increase lending from those banks where the government holds a majority stake is still relatively modest and is unlikely to raise available mortgage finance this year by as much as 10% compared with 2008. While it is conceivable that rising unemployment may gradually curb the enthusiasm of potential house purchasers, at this stage the combination of lower prices and the cheaper cost of money is proving the more powerful influence."