MORTGAGE lending was around 4% lower in August than a year ago, despite the launch of an £80bn scheme to boost the struggling economy, according to new figures from lenders.
Gross mortgage lending stood at an estimated £12.6bn last month, representing a 1% decrease compared with July and a 4% fall from the £13.1bn figure recorded in August 2011, the Council of Mortgage Lenders (CML) said.
However, the lending body said it expects buyer interest to be stimulated in the coming months by the Bank of England and the Treasury’s £80bn funding for lending scheme, which was fired into action at the beginning of last month.
It said a NewBuy scheme, which has already been running for around six months and enables buyers to purchase a new-build home with a fraction of the usual deposit, will also help to give buyers a boost.
CML chief economist Bob Pannell said: “We expect to see stronger take-up of NewBuy over the coming months, helped by a concerted marketing effort by builders and the recently-launched funding for lending scheme, which has prompted reductions in NewBuy mortgage rates.”
The funding for lending scheme aims to unclog the flow of credit by making money available to banks on condition they pass it on in the form of cheaper loans and mortgages.