The gross amounts being lent as home loans across the country took a further dip last month, according to the Council of Mortgage Lenders (CML).
A total of £25.5 billion was borrowed as mortgage debt last month, which is almost 19 per cent down on the same figure for May 2007.
With many homeowners finding it tough to keep up with their debt management demands, the CML is expecting to see the housing market remain “very weak” over the next few months at least.
The council suggested that it is hoping to see the Bank of England’s special liquidity scheme have a positive impact on lending activity but so far it has had only a very limited effect.
Chief UK and European economist at Global Insight, Howard Archer, said: “The bad news on the housing market is pretty relentless at the moment, with the low level of mortgage activity for house purchases being a consequence of a damaging mix of stretched buyer affordability and very tight lending conditions.”
Equifax reported recently that the UK’s debt management position is such that an increasing number of homeowners are fearful of having their property repossessed.
By Johan Young