UK Mortgage lending declines 10% in September
February 9, 2009 by admin
Filed under Mortgage News
Gross UK mortgage lending declined to £17.7 billion in September, according to the Council of Mortgage Lenders (CML). This marked a drop of 10% from August, and 42% from September 2007.
Even though a seasonal fall ‘is typically experienced between August and September’, this £17.7 billion figure represents the lowest gross lending figure seen since January 2005.
Total third-quarter gross lending is estimated to be around £62 billion – a 16% drop on the previous quarter and a 37% year-on-year drop.
Despite the low figures, CML director general Michael Coogan stressed that the mortgage market is still “open for business”, but added that he expects funding restraints and weakening demand to dampen lending throughout the remainder of 2008 and into the first quarter of next year.
Mr Coogan stated that: “We estimate gross lending in 2008 will be around £255 billion (£363 billion in 2007) and net lending of around £40 billion (£108 billion in 2007).”
Funding issues and weakened consumer demand are inevitably having an impact on house prices. According to Nationwide Building Society, the average house price dropped to £161,797 in September 2008, a drop of almost £25,000 from the peak prices seen in October 2007.
However, Nationwide’s chief executive, Graham Beale, does believe that the end of these house price drops is in sight. In an interview with the BBC, he stated that he expects the housing market to show signs of recovery in 2010 – and that he expects the average ‘peak-to-trough’ fall in prices to reach 25%.
“I think that next year we will see a similar pattern to this year,” he said. “…we will see further falls in house prices. And I think before we really get to the new world, whatever that is, I think we will be into 2010.”
Related articles:
Comments
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!