Gross mortgage lending was an estimated £11.5 billion in March, a 24% rise from £9.3 billion in February and a 3% rise from £11.2 billion in March 2009, according to data published today by the Council of Mortgage Lenders (CML).
This is in line with the typical seasonal pattern of a rise in lending volumes in March.
Gross lending for the first quarter of 2010 was however at a 24% decline from the fourth quarter of 2009 and a 9% decline from the first quarter of 2009 – an estimated £29.5 billion.
This is the lowest quarterly lending total since the first three months of 2000, but is very much in line with the CML’s forecast of a gross lending total of £150 billion this year.
CML economist Paul Samter commented:
“Overall, housing and mortgage activity remains subdued, but is comfortably higher than in the depths of the recession a year ago. Despite the increase in activity late last year and a subsequent fall early this year – due to the end of the stamp duty holiday – the underlying position looks to have barely changed. But with the gradually improving economic backdrop and interest rates still low, we continue to expect a gentle improvement in market conditions later in the year.
However, the longer-term problems facing the market remain and will limit the speed of recovery in the housing market and wider economy. Financial institutions still face the prospect of around £300 billion of official support schemes beginning to end from next year, and will need to find alternative funding sources. This will likely limit how much new funding can be made available to the housing market.”
So although there have been stories of the bank’s being told to make more lending available I think we are unlikely to see much of an increase with this £300 billion of funds needing to come from somewhere.
What do you think? Will we see an increase in lending this year, next year or further in the future?
