According to a report by Datamonitor, mortgage lending will fall by 19.3 per cent during 2008, with total advances of £293.55 billion made during the year.
Although Datamonitor paints a bleak picture, the Council of Mortgage Lenders has revealed that gross mortgage lending in July 2008 totalled an estimated £24.8 billion in July, actually up 5 per cent on June figures.
But the lending group’s numbers do match Datamonitor’s estimations – the gross lending figure for July was down by 27 percent from July a year ago.
The research group has compared this to the growth of 19.7 per cent recorded during 2006 when the market was booming, Advances rose by a further 5.4 per cent in 2007 to peak at £363.8 billion.
Datamonitor says total mortgage advances reached just £149.5 billion during the first six months of 2008, 18.9 per cent below advances made during the same period of the previous year.
The report also predicts that followed by a further drop of 3 per cent in 2009.
Datamonitor financial services senior analyst Karina Purang says: “The consumer lending market has moved beyond recognition. Lending markets are currently beset by high market uncertainties with the ongoing credit crunch, falling house prices, rising arrears and repossessions and indebted consumers struggling to find credit.”