Lending ‘continues to stabilise but is still low’

Recent mortgage figures reveal that while the market has steadied over the last few months it remains depressed, according to one expert.

Director general of the Building Societies Association Adrian Coles said that although the economic situation seems to be recovering it has not reached levels seen in 2008.

He said: “Gross mortgage lending by building societies was £1,515 million in May 2009, a similar level to the previous two months, but still 57 per cent lower than gross lending in May last year.”

Savings statistics showed that balances held by buildings societies had reduced by £106 million in May this year, whereas in the same month for 2008 it had increased by £1,162 million.

Mr Coles suggested that access restrictions on wholesales funding markets will lead to increased competition for retail deposits.

In recent news, head of mortgages at comparison site moneysupermarket.com Louise Cuming said a “flurry of activity” in the market had not been beneficial for most consumers as many lenders had hiked charges.

By Francis Finch

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