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Measures to boost lending in UK property market not filtering through

Gross mortgage lending in April was an estimated £10.4 billion, 9% less than the £11.4 billion in March and 60% less than in April 2008, according to the latest figures from the Council of Mortgage Lenders.

Some of the fall could be attributed to the fact that Easter fell in April this year, the CML said, while Easter last year was in March. Taken together, lending for March and April was down by 57% on a year earlier.

'It's still too early to spot a clear pattern of recovery in the housing market as some commentators have suggested. Activity remains weak and we have said we will see volatility in monthly lending figures as we bounce along at the bottom of the market,' said Michael Coogan, the CML's director general.

However the poor figures for April have not affected the CML's forecast for gross lending for the year. Coogan said that it still expects £145 billion in 2009.

But others are pointing out that these figures are particularly disappointing at a time when the government is encouraging lenders to lend more and the property industry is telling everyone that lending needs to improve if the market is to recover.

With the credit crunch still inhibiting the ability of banks to borrow and lend severe rationing is still being applied to would-be mortgage borrowers. About two thirds of all mortgage deals currently on offer specify a downpayment of at least 25%, although there has been a slight relaxation by lenders recently.

'It's clearly disappointing to see the lending figures drop and this is a stark reminder that the market remains tough, with a continued restriction in mortgage availability,' said David Hollingworth of London & Country Mortgages.

'Although some innovative new mortgage products have been launched recently the fate of the property market is still very much in the hands of the lenders,' said Andrew Montlake of mortgage brokers Coreco.