Gross mortgage lending fell slightly in May after making a small recovery in April this year, according to the Council of Mortgage Lenders (CML).
However, gross lending volumes are down by almost a fifth since last year, and are unlikely to improve in the near future.
Overall, gross lending in May reached £25.5bn, down 2% from 26.1bn in April, but still above the recent low point of £24.1bn seen in March 2008.
On an annual basis, lending volumes have plummeted 19%, from a high of £31.5bn in May 2007.
Michael Coogan, director general of the Council of Mortgage Lenders (CML), comments: “The remortgage market remains on track to meet our forecast for growth this year, demonstrating the resilience of the market despite recent bad news.
“However, by comparison, the next few months will remain very weak for house purchase activity for the funding reasons which are now well rehearsed. We still await first signs of the Bank of England’s Special Liquidity Scheme indirectly helping to ease the current logjam.”
With Halifax saying house prices could fall 9% this year, and Bank of England Governor Mervyn King predicting a gloomy economic outlook for the next couple of years, it may be some time before gross lending volumes return to the level reached in 2006 and 2007.
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