Mortgage lending falls again

Mortgage lending volumes are back on a downward trend, new figures have indicated.

Council of Mortgage Lenders (CML) statistics showed that after April's five per cent rise in volumes to £26.1 billion, lending was down to £25.5 billion in May.

While describing this as a historically strong figure, the CML acknowledged that it was well down on 2007 rates and said this downward trend was likely to continue.

CML director general Michael Coogan predicted: "The next few months will remain very weak for house purchase activity for the funding reasons which are now well rehearsed."

He added that there is no sign yet that the Bank of England's special liquidity scheme is having any beneficial effect on the mortgage market.

Those planning to remortgage have recently been hit by some banks raising their remortgage rates.

Nationwide raised its fixed and tracker remortgage rates this week, blaming the high money market lending rates.