Mortgage lending fell 13 per cent in August, the latest figures from the Council of Mortgage Lenders (CML) show, marking a 37 per cent decline on the same time last year.
As funding for banks and homeowners alike remains hard to come by, gross mortgage lending estimated £12.6billion last month, the CML has revealed today, down from £14.5billion the previous month.
While the CML explains that a seasonal decline is to be expected in August, the figures are a far cry from last August's £19.9billion of gross mortgage lending.
But despite the seasonal decline and continued lack of availability in the mortgage market, the CML suggests that underlying lending levels seem to have stabilised throughout the summer months, with stronger levels of lending for house purchase and lower levels of remortgaging.
The CML expects this to continue for the rest of 2009 without a significant rise in mortgage lending as funding constraints continue to leave potential homeowners disappointed.
Commenting on the lending figures, CML economist Paul Samter says: "The likelihood of a significant pick-up in lending remains weak, but the prospects for wholesale funding markets are improving. This could result in a gradual easing in constraints on the supply of funding over time.
"However, demand from consumers and a prudent approach to lending criteria are likely to mean that the market remains subdued."
© Fair Investment Company Ltd