Lending squeeze means home loans slump 50%

Published on Tuesday 12 August 2008 21:23

THE number of loans for house purchase slumped by 50 per cent in June as lending criteria continued to tighten, new figures yesterday revealed.

There were 47,000 loans taken out over the month, less than half the 98,000 in June 2007, according to the Council of Mortgage Lenders (CML). Gross mortgage lending fell to 23.6 billion, down 4 per cent from May and 32 per cent from June 2007.

The number of loans given to first-time buyers dropped to 18,100, an 8 per cent decline from May and 46 per cent less than the figures for June last year.

Bob Pannell, head of research at CML, said: "Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand."