Mon, 24 Sep 07
Gross mortgage lending by banks, building societies and specialist lenders fell by 6% in August compared with July, to an estimated £32.2 billion from £34.1 billion, according to the Council of Mortgage Lenders...
This was 3% down on the £33 billion figure for August last year. The figures are not seasonally adjusted.
The lending figures published today relate to a period when the current wholesale funding pressures being experienced in the market were less pronounced. During September, a number of lenders have withdrawn lending products, amended their lending criteria, or re-priced their deals.
Not all the re-pricing has had the effect of increasing the cost to the consumer; some lenders have reduced the rates on their fixed rate mortgage products.
It is too soon to say with accuracy what September lending volumes are likely to show, although initial indications suggest that lending remains robust.
The reduction in available funding could in due course translate through to a reduced supply of lending, although the Bank of England's most recent interventions to support liquidity in the interbank lending market may help to restore the availability of funding more quickly than would otherwise have been the case.
Still at ‘very high’ levels
Commenting on the data and the current situation, CML director general Michael Coogan said: "Lending fell slightly in August, but was still at very high levels. We see no obvious decline in consumer demand, although some decrease in the supply of lending is being experienced in the short term as a result of the problems lenders face in raising wholesale funding.
"The events of the past week have shown us how very quickly situations can change. Even after the good news on inflation falling back, the Fed's rate cut, and the Bank of England's support for 3-month funding, it is not a given that the Bank will follow suit on cutting rates. It makes sense for consumers to continue to plan for rates at or about their current levels for the foreseeable future - we are not out of the woods yet."
Back to: News Index