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CML: Lending down again
25 March 2008 11:30
Mortgage lending declined in February, according to new figures from the Council of Mortgage Lenders (CML), highlighting the liquidity problems constraining the market.
An estimated £24 billion was lent to borrowers last month, which was the second poorest lending figure recorded in the past year and was also down from £25.6 billion in February 2007 and from £25.93 billion in January.
CML director general Michael Coogan noted that there is still strong demand for mortgages but that this is now outstripping the funding currently available and will continue to do so unless the Bank of England acts innovatively to improve the situation.
He claimed that this lack of liquidity was forcing lenders to reduce their product ranges, put up their prices and in some cases lower their lending capacity, although he defended such actions as the necessary response to continually changing credit conditions.
Borrowers will however have been slightly heartened by the recent revelation that two of the Bank of England's Monetary Policy Committee voted in favour of a base rate cut earlier this month, increasing the probability of a reduction taking place in April.
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