Council of Mortgage Lenders says only 42,200 house purchase loans made in August

House purchasing lending in August was down 63% compared with the same time a year ago, according to the Council of Mortgage Lenders (CML).

Just 42,200 house purchase loans were made in August this year - 15,600 of them to first-time buyers - and both the number and value of house purchase loans were the lowest since the CML began collecting monthly data in January 2002.

At just £1.9bn, first-time buyers accounted for just under a third of total £6bn house purchase lending, typically borrowing 84% of the value of the property and 3.18 times their income, down from 90% and 3.39 in August last year.

There were 26,000 loans to home movers worth £4.1bn, down 61% in volume and 64% in value from August last year. The typical home mover advance was £126,000 - the lowest since June 2006.

Seventy-four thousand loans for remortgage worth £10bn were given, down 20% in volume and 9% in value from August 2007 – the lowest level of remortgaging volume and value since March this year.

Commenting on the government’s injection of funds yesterday, CML director general Michael Coogan said: “The package of measures would have a positive effect, but it will take time for it to feed through to the mortgage market.”