Lending figures from last year published by the Council of Mortgage Lenders (CML) show a total of ?256.4bn last year, compared with ?363.7bn in 2007.
The drop in lending is a direct result of the credit crunch and the difficulty faced by many to secure a loan for a property. Even now that mortgages are becoming more available people are reluctant to buy while house prices are still falling.
As expected, the figures show that December was the worst performing month since April 2001, when lending fell to ?12.6bn, down from ?14.2bn in November and 47 per cent lower than December 2007.
Michael Coogan, CML’s director general explained that: “December is typically a quiet month in the mortgage market, on top of which the market has been constrained by a shortage of funding and reduced demand.”
Separate data from Her Majesty’s Revenue and Customs (HMRC) showed that about 61,000 home sales were completed in December ? 41 per cent lower than in the same month in 2007.
On a positive note though, this was a rise from the 52,000 completed transactions seen in November, and in line with levels seen in the autumn.
Despite this welcome statistic the CML has warned that they expect mortgage lending rates to decline even further before we start to see any improvements, saying that it is unlikely that things will pick up until later this year.
The CML spokesperson also praised the Government?s latest movements to trigger the market for housing as ?essential and welcome?.
