This is marginally lower (1%) than July’s gross lending figure of £12.7 billion and a 4% fall from £13.1 billion in August 2011.
In today’s market commentary, CML chief economist Bob Pannell comments:
"House purchase activity continues to be a little above year-earlier levels, but the housing numbers are far from strong.
"We expect to see stronger take-up of NewBuy over the coming months, helped by a concerted marketing effort by builders and the recently launched Funding for Lending Scheme, which has prompted reductions in NewBuy mortgage rates. Both factors should stimulate buyer interest.
"The Funding for Lending Scheme is a bold move that has the potential to greatly influence the course of the housing market over the next year or so. While not a panacea for all housing market problems, the scheme does offer the potential to improve the lending environment. Unfortunately, it will be towards year-end before any initial assessment of its impact can be reached."
Paul Hunt, managing director of Phoebus Software said:
“The dreary economic landscape is keeping the rate of housing activity slow and subdued, as consumer confidence and recession-hit Britain makes it tough for the property market to return to healthier levels. However lenders have proved to be of vital importance in making the market progress. As the economy remains lifeless, they have helped overcome potential crisis by displaying a willingness to lend through the provision of innovative products and a positive approach to borrowers finances. The Government’s £80 billion Funding for Lending Scheme, launched this month and the latest New Buy Scheme should make mortgage products more attractive and hopefully will mean borrowing starts to flow again.”
David Brown, commercial director of LSL Property Services, comments:
“Mortgage lending is still bouncing along the bottom, acting as an ongoing brake on purchase activity from those without substantial equity or the ability to buy in cash. The Funding for Lending scheme should make life easier for lenders to provide cheaper finance for those buying their first home, but we’ve yet to see its influence in the monthly lending figures, and the current level of lending is more reflective of lenders’ concerns over their balance sheets and exposure to the Eurozone crisis. However, the scheme will need to drive a drastic improvement in the number of first time buyers able to access cheaper finance if we are to see a lessening of pressure on the private rented sector.”
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“The launch of the Funding for Lending Scheme last month saw an increase in the number of competitive products being launched. It will have been too soon for this to filter through to the August figures, but I’d expect this will start having more of an impact on activity levels over the remainder of the year.
“However, if there is to be a lasting effect we really need to see more lenders launching high loan to value products. We are encouraged that Aldermore Mortgages have launched into the New Buy market and we need more lenders to engage in this important sector of the housing market both to offer greater choice and drive competition. First-time buyers are the lifeblood of the industry and until we can address this the lending environment will not fully recover.”
