In April mortgage lending in the United Kingdom dropped by nearly 20%, according to data recently released by the Council of Mortgage Lenders. Figures for April show mortgage lending was an estimated £10.2 billion, compared to £12.6 billion in March, which means lending has grown by just 2% year on year since April 2011.
In spite of the decline economists think the underlying picture is better than suggested, and point out many first-time buyers took advantage of the stamp duty concession which came to an end in March, and that mortgage lending has been relatively buoyant during the last few months.
It looks uncertain as to whether this will continue, as the crisis in the Eurozone could negatively affect the UK economy, and could cause conditions in the housing and mortgage markets to worsen. Overall most expect momentum in the housing market to slow down, but if the crisis in the Eurozone becomes particularly bad then it could cause a sharper correction. The Eurozone crisis has been ongoing for many months now, and in spite of this, lenders have still managed to increase activity since the same time last year, and mortgage demand is generally pretty healthy.
There are still considerable numbers of first-time buyers and buy to let investors who are being turned down for finance, as many are failing to qualify for high loan to value mortgages, and are being forced to look for alternative forms of funding.
With celebrations for the Queen’s Diamond Jubilee just around the corner, and with the Olympics due to begin in just a couple of months, the housing market is likely to slow down over the summer anyway, and experts think figures for the rest of the year will fluctuate between decline and growth.