The Council of Mortgage Lenders released recent figures indicating total mortgage lending will have to pick up the pace to simply equal figures from last year.  Overall, during the first half of this year a total of 33.5 billion pounds was approved for mortgage lending, down more than 2% compared with last year.  Causes of the decrease continue to dominate the economic landscape.  High inflation and high unemployment fears remain, as the housing market stays ready for a much-needed shot in the arm.

The dismal figures keep pouring out of the housing market, as the third quarter has begun with no concrete indications of more relief.  Gross lending is now more than 50% off the mark compared with the second quarter of 2008.

The chief economist from the CML, Bob Pannell, commented on the continuing economic woes, saying: “The UK economy continues to experience disappointing economic growth, strong consumer price pressures, falling disposable incomes and an uncertain jobs market. This backdrop weighs negatively on purchase decisions relating to home ownership.”

Richard Sexton, of e.surv, believes the slight surge in housing figures from June were just a sprinkling, and that most lenders were simply trying to meet their mid-year lending goals.

He also commented on the difficult chore at hand for lenders, saying: “In reality, lenders are stuck between a rock and a hard pace. On the one hand they have a commitment to improve their capital, while on the other they are under political pressure to increase lending. These competing views are totally irreconcilable. 

“If anything, the next few months are likely to see suppressed activity while lenders recoup equity and nurse balance sheets that still have to juggle a variety of risks.”