Mortgage lending rate down

August saw the lowest level of mortgage lending since April 2005 and the lowest August figure since 2002. The Council of Mortgage Lenders, who published the figures, say that low housing turnover and limited remotgaging activity will keep lending subdued in the immediate future.

Michael Coogan, Director General of the CML said: “These figures reflect the heightened uncertainty for both lenders and consumers in the mortgage market at present. Lenders are uncertain about future sources of funding and the cost of funding, while consumers are unsure about how much further and for how long house prices will continue to decline.”

The collapse of Lehman Brothers earlier this week will exasabate the problem as lending rates between banks increse with a knock-on effect on the general public. It is unlikely that mortgage lending rates have reached their lowest yet.

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