Treasury fund fails to boost mortgage total
Mortgage lending was around 4 per cent lower in August than a year ago, despite the launch of an £80bn scheme to boost the struggling economy, figures from lenders showed on Thursday.
Gross mortgage lending stood at an estimated £12.6bn last month, representing a 1 per cent decrease from July and a 4 per cent dip from a year ago, the Council of Mortgage Lenders (CML) said.
However, the lending body said it expected buyer interest to be stimulated in coming months by the Bank of England and the Treasury’s £80bn “funding for lending” scheme, which was put into action at the beginning of last month.
“The funding for lending scheme is a bold move that has the potential to greatly influence the course of the housing market over the next year or so,” said Bob Pannell, CML chief economist.
He said it would be “towards year-end” before any initial assessment of the impact of the scheme could be reached.
Separately, a survey of the manufacturing sector found companies expected their output to rise modestly in the next three months. After a tough summer, 28 per cent of manufacturers surveyed by the CBI business group said they thought their output would expand in the next three months, while 21 per cent thought it would shrink.
Anna Leach, CBI analyst, said: “Domestic and overseas demand have improved in this survey following last month’s falls . . . but uncertainty is expected to build through the autumn – with key decisions to be made in the eurozone and the approach of the US fiscal cliff – meaning conditions are likely to remain difficult for UK manufacturers.”