CML: Mortgage lending affected by funding shortages

18-Jul-2008

Fewer people were granted a mortgage during the month of June, according to new figures.

The Council of Mortgage Lenders' (CML) data indicate that lending in the first quarter of this year was down 11 per cent on 12 months earlier, while the second quarter was down just over a fifth.

Michael Coogan, the CML's director general, said a "traditionally busy" time of year for mortgage lending had been affected by funding shortages and dampened consumer demand.

Referring to government efforts to help first-time buyers save for a deposit, Mr Coogan expressed reservations that they will only have "a marginal impact "on the market.

"The recent reduction in short-term fixed-rate mortgage costs is a small bit of welcome news for hard-pressed households facing significant pressures on their finances from the higher cost of food and fuel," he continued.

"However, borrowers on tight budgets will have to plan ahead to manage higher mortgage payments than they have been used to," concluded Mr Coogan.

The CML's comments follow housing minister Caroline Flint's announcement that first-time buyers in England who earn less that £60,000 are to become eligible for a Rent to Home Buy pilot scheme, enabling them to rent a property at a discounted rate and eventually buy part of it.

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