CML lending figures offer no comfort to those worried about the availability of credit - 19.11.2010

Author: David Whittaker Posted on: 18 November 2010

Gross mortgage lending in October was an estimated £12.4 billion, unchanged from September but down 9% from £13.6 billion in October 2009, according to new data from the Council of Mortgage Lenders. This is the lowest October total since 2000 (£9.9 billion).

The month-on-month annual comparison is likely to continue to decrease a little in the coming months, because underlying lending volumes rose sharply in the latter part of 2009 as borrowers rushed to take advantage of the stamp duty concession before the end of the year.

These figures offer no comfort to those of us worried about the availability of credit in the market. Lenders are beginning to resemble Sisyphus’ boulder, as the market continues to struggle against the weight of onerous lending criteria and limited liquidity. While 2010 lending looks likely to reach £135 billion, this is hardly an opening of the floodgates for the property market. We can take some comfort from the fact that lending hasn’t fallen month on month and the fact that lending in October 2009 was 9% higher than it is this year is less discouraging when one remembers the rush at the back end of 2009 to beat the stamp duty hike. 

Nevertheless, pressure will persist for private rental to make up the gap left by frustrated would-be buyers and it remains to be seen whether government is ready to give landlords the assistance they need if they are to bridge the gap left by the purchasing freeze.