According to officials from the Council of Mortgage Lenders the global credit crunch in the UK is continuing to wreak havoc in the mortgage markets, resulting in the mortgage squeeze and tighter lending conditions continuing. The latest figures from the CML showed that mortgage lending levels for May was 2% lower than in April, and was 19% lower than it was in May of last year. Mortgage lending for May came to around £25.5 billion.
Michael Coogan from the CML stated: “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.” It was last summer when mortgage lending levels reached a peak, as the housing market reached the peak of a ten year boom before the bubble eventually burst.
However, the global credit crunch, which made its way to the UK late last summer saw the mortgage market and the housing markets take a massive hit. Since then, house prices have been falling, with a number of industry officials predicting house price falls of between 5% and 20% in most cases. The Halifax has recently released a report that predicts that house prices will fall by a further 9% over the course of this year, which is its third downward revision since the start of the year.
The problems in the mortgage market resulted in the government putting forward to a plan to try and ease liquidity in the loans lending markets, but according to some industry officials there is no sign of any improvements as a result of these measures as yet.