Slight monthly rise in March bucks overall downward trend of mortgage lending

Mortgage lending fell 8% in the first quarter of 2008 and is likely to continue falling for the rest of the year, despite a slight monthly rise in March, said the Council of Mortgage Lenders (CML).

Gross lending rose 5% last month to £26.3bn, up from £25bn in February. However, the CML said that this was far less than the 20% rise usually seen between February and March. Lending in March was also 17% lower than for the same month a year earlier.

Lending in the first quarter as a whole was down 8% compared with the first three months of 2007.

Michael Coogan, director general of the CML, told the BBC: “Lending on completed transactions is currently running at levels considerably lower than a year ago. However, the picture for mortgage approvals for new business and prospective lending levels in the next few months is worsening.”

The CML said it is hoping for further action from the Bank of England to help the market.