Mortgage lending falls in April

The value of new mortgage lending fell last month to its lowest April total in 10 years, according to latest figures from the Council of Mortgage Lenders (CML). Gross mortgage lending declined to £10.2bn in April, down 12% from £11.6bn in March and down 1% from £10.3bn in April 2009. In April 2000 the total was £9.3bn. A slight seasonal decline was expected as Easter fell in April this year, the CML said, but the slowdown was compounded by the continuation of a difficult mortgage market with first-time buyers in particular struggling to save big enough deposits to make a purchase. Despite the fall in lending last month, the number of loans agreed year-on-year in March increased by 45% , according to CML figures released earlier this week. Remortgaging over the year was down 29%. The CML's director, Michael Coogan, said that although there have been signs of increased mortgage availability in recent months with higher loan-to-value mortgages becoming available and rates falling slightly, lenders still faced significant "funding challenges". "We welcome signs in the coalition agreement that some housing priorities are on the government's radar," he said. "But we still do not know how the incoming government plans to address the funding gap looming over the next few years in the mortgage market. "Unless funding issues are addressed, any recovery in lending may well be curtailed as the repayment date on the support schemes gets closer." These schemes include the homeowner mortgage support scheme , which allows lenders to reduce a borrower's current monthly mortgage payments with the deferred amount rolled up, added to the loan, and paid at a later date when the borrower's financial circumstances have improved. The government guarantees the lender against a proportion of any loss incurred on the deferred interest payments in case the borrower defaults. The new coalition government has yet to make an announcement on what it intends to do about such schemes, many of which are set to be wound up at the end of the year, but could be pulled at any time. Yesterday, the coalition did make some announcments on the housing market, including the scrapping of home information packs . It also said it will "review the effectiveness" of the £250,000 stamp duty expemption for first-time buyers.