Statistics released by the CML today reveal a 3 per cent drop from May and a 32 per cent slide year-on-year.
Gross lending in June was £23.8b, down from £34.9bn in June 2007. May 2008 meanwhile recorded £24.5bn, and April £26.1bn.
CML director general, Michael Coogan says the reason for the decline is funding shortages and consumer demand. And while government efforts to revive the market through housing schemes are welcome, he says they will have little impact.
He says: “Market activity has been muted by funding shortages and, more recently, dampened consumer demand. While by historic comparisons we still have had a good level of gross lending, new net lending has been constrained in 2008 and this picture will continue for the rest of this year.”
The CML now expects activity to gather pace by spring.