Gross mortgage lending in August was an estimated £12.6 billion, according to the Council of Mortgage Lenders (CML).
This is 1% than July’s gross lending figure of £12.7 billion and a 4% fall from £13.1 billion in August last year.
“House purchase activity continues to be a little above year-earlier levels, but the housing numbers are far from strong,” said CML chief economist Bob Pannell.
“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 added: “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.”