On a year on year basis gross mortgage lending was up 4% and net lending was £200 million last month, well below the £300 million level of March.
Duncan Kreeger, director at peer to peer lender West One Loans, described the data as a disappointing set of figures, in particular the serious deterioration in business lending. He explained that this continuously poor performance is one of the reasons why alternative business finance is booming and it is now lending over £1 million pounds each day.
‘Some members of the BBA are trying to lend more. But sadly the results speak for themselves particularly in mortgage lending. This month in 2007 saw the very same banks lending more than twice what they’ve managed in April 2013,’ he said.
‘Mortgage lending has suffered a 60% drop since this pre-crisis peak and even the most optimistic predictions don’t expect mainstream banks to take up that slack for perhaps a decade, if ever,’ he added.
However, according to David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, falling rates have begun to translate into an increased number of mortgage approvals.
‘High LTV lending is creeping up slowly but surely, with more first time buyers able to realize their dream of home ownership. Many buyers are hurrying to take advantage of the excellent rates and products on offer from banks,’ he said.
‘However, the race is still being led by those with sizeable equity or large deposits. Lending volumes are still far from ideal, and too many high LTV borrowers are still being locked out the market. Progress is being made, but there is a long way still to go,’ he added.
He believes that things should carry on improving in 2013. ‘With government initiatives trickling through, including the extension of the Funding for Lending scheme, the housing market is taking steps forward. The Help to Buy scheme is providing grounds for improvement,’ he pointed out.
‘How many steps forward the UK housing market takes in 2013 will be determined by lenders’ ability to target buyers with the smallest deposits with cheaper loans, and by how far they can breathe new life into the bottom tier of the market,’ he added.
