Mortgage Market '19% Down on Last Year'

Mortgage lending was 19 per cent down on 2007 levels last month, the Council of Mortgage Lenders (CML) confirmed today.

The body confirmed that mortgages worth £26.5 billion were advanced in May, which is a drop of £5 billion, year on year. Lending levels were also down by two per cent, cancelling out the eight per cent gain they had made in April.

Nevertheless, monthly lending remains comfortably above the low of £23.9 billion recorded last December. A combination of tougher lending criteria being enforced by mortgage firms and a loss of confidence in the property market among consumers has been blamed for the continuing housing malaise in the UK.

Michael Coogan, CML director general, said: "The next few months will remain very weak for house purchase activity for the funding reasons, which are now well rehearsed." He added: "The remortgage market remains on track to meet our forecast for growth this year, demonstrating the resilience of the market despite recent bad news."

House prices in the UK are also thought to be on the decline: the most recent survey from Halifax, the country's biggest mortgage lender, suggests that they are dropping at a rate of around 2.5 per cent a month.