Record year ends in lending slump

Posted on 22 January 2008 by Charcol

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Mortgage lending dropped by a quarter between November and December last year, the Council of Mortgage Lenders (CML) has revealed.

Its monthly release of figures shows that, while overall lending for 2007 was the highest on record, December saw the lowest monthly lending total for two and a half years. The CML says that the drop of 25% during the period compares to an average seasonal fall of just 6%.

Director-general of the CML Michael Coogan said that the recent drop in the rate at which banks lend to one another, coupled with a likely cut in the Bank of England rate, should ease the situation.

"Overall, despite the funding constraints caused by global conditions, the UK mortgage marketplace remains highly competitive and there will continue to be a range of good deals available to better risk borrowers."

Today, the US Federal Reserve slashed interest rates by three-quarters of a percentage point, in a surprise move to head off falling share prices and a feared economic downturn.

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