'Subdued' lending in March reported

13 May 2008

Lending for home purchases in March has remained subdued, according to recently released figures.

Statistics from the Council of Mortgage Lenders (CML) reveal that the number of loans for house purchase fell to 46,500 in March 2008, down one per cent on the previous month and 48 per cent on the same month last year.

The group claimed that these figures relate to a decline in house purchase transactions and mortgage completions and is partly due to the shortage of funding in the mortgage market because of the current credit crunch.

Michael Coogan, director general of the CML, said: "House purchase transaction volumes will continue to deteriorate in the coming months as recent approvals data from the Bank of England has shown."

He added that there has been a slight improvement in credit market conditions but said that improvements will take time to come through to the mortgage market.

Last week, the monetary policy committee of the Bank of England voted to maintain interest rates at five per cent.

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