Mortgage lending hits ten year low for August

Recent figures released by the Council of Mortgage Lenders has shown that mortgage lending levels for August fell to the lowest levels in ten years for the month. The CML said that activity in the housing market remained ‘exceptionally’ low for the month, with lending levels for the month making for gloomy reading.

The CML has now stated that the second half of the year is likely to be a difficult one, with lending levels expected to be below the level seen during the final months of last year. This is partly due to the fact that activity was more buoyant in the final months of last year due to the fact that the stamp duty holiday provided by the former Labour government was coming to an end at the end of the year.

The group did state that there was a slight drop in average mortgage rates for the month of August, as competition in the mortgage market increased, driving interest rates down slightly. However, restrictions still remained tough amongst the various lenders who were being cautious about lending.

Banks and financial institutions have also continued to demand high deposit levels from groups such as first time buyers, which is still having an effect on lending levels, as it means that many are unable to apply for a mortgage because they do not have the necessary deposit to back it up.

Net6 lending for the month of September is set to remain subdued, as lenders have reported a slight fall in the number of mortgages that have been approved for property purchases for the month of August.

In the meantime the Bank of England has stated in its most recent quarterly bulletin report that lenders have been failing to pass on base rate cuts to consumers, partly due to the fact that they faced higher borrowing costs themselves.

Tags: mortgage, group did state, mortgage market, borrowing, Mortgage loan, gloomy reading, council of mortgage lenders, finance