Mortgage lending is still proving difficult to obtain by would be home buyers and remortgaging homeowners.  According to the Council of Mortgage Lenders (CML) lending declined in April by 19 per cent to a value of £10.2 million which was down from the £12.6 million recorded in March.  This was a 12 month low in mortgage lending.

CML chief economist Bob Pannell remarked, “Mortgage lending activity has been relatively buoyant in recent months, with stronger lending for house purchase underpinning the more upbeat lending picture.

“The picture is likely to be stronger than the April figure suggests, because some first-time buyers are likely to have brought transactions forward to March to take advantage of the stamp duty concession that was coming to an end.

“Eurozone developments are uncertain and could undermine UK economic prospects and housing and mortgage markets. The picture is likely to be one of easing momentum in the housing market, but with potential for a sharper downwards correction on bad eurozone news.”

Lending has tightened as lenders have become more cautious concerning the problems in the eurozone.  Deposit levels are still very high and it is difficult for hopeful homebuyers to save for such high deposits when rental fees are rising and pulling more of their savings from them.  The mortgage loans are also carrying higher interest rates as lenders pull their cheapest deals and replace them with slightly higher deals to offset their rising costs in funding loans.

The housing market is not expected to rebound to a recovery mode any time soon as house prices have been forecasted to fall an additional 1.3 to 2.0 per cent by year’s end.