The home loan market continues in its state of torpor, according to the latest survey from the Council of Mortgage Lenders (CML).
The CML has found that just 52,000 new home loans were approved in May. That represents a small rise of 4 per cent from the previous month, but it is still a whopping 44 per cent lower than the same month in 2007.
"Lending levels continue to be lower than last year and any recovery is still some way away," said the CML's director-general, Michael Coogan.
He added that the number of loans approved for house purchases could decline further over the coming months, with property prices falling in many parts of the country.
The number of people choosing to remortgage in May was down 14 per cent on the previous month and 22 per cent year on year – even though an estimated 116,000 homeowners a month are now coming off comparatively cheap fixed-rate deals and, in most cases, seeing their mortgage costs go up. Normally, this would provide a spur to remortgaging but, because of the credit crunch, large numbers of homeowners are finding it difficult to find a deal competitive enough to switch to. In other cases, they are simply being prevented from changing provider as a result of the tighter criteria now imposed by lenders.