The short-term future of the UK property market seems bleak, lenders have said.
Mortgage lending grew by five per cent from March to April, according to the Council of Mortgage Lenders (CML).
However, the association was downbeat on prospects across 2008, pointing out the fact that year-on-year lending had also declined by eight per cent over this period The CML said that £25.3 billion was transacted this month.
Looking ahead, the body predicted that house prices would decline by seven per cent before the end of the year, with transaction numbers 35 per cent down. In addition, gross lending for 2008 is expected to hit £285 billion, which is 21 per cent below last year's total.
Nevertheless, mortgage arrears and repossessions rates are expected to remain low, meaning that the housing crash of the early 1990s is unlikely to be repeated.
Commenting on the findings, CML director-general Michael Coogan said: "Over the next few months, lending volumes will get worse before they get better.
"The market is still very uncertain, but lenders are working hard to ensure that borrowers coming off fixed rates remain on track, that arrears and repossessions are minimised, and that pricing is as attractive as they can make it in a market where they must manage the demand for lending with caution."
