A lending crackdown by worried banks will squeeze would-be borrowers this year despite glimmers of revival in December, the Council of Mortgage Lenders warned yesterday.
The CML expects £133bn in gross lending from banks and building societies this year, 5 per cent down on the £140bn lent in 2011.
Its chief economist Bob Pannell warned that the first half of 2012 would be particularly tricky as a fast-fading economy and the eurozone crisis takes its toll on lenders. "The near-term prospects are relatively lacklustre, although the second half should be stronger," he said.
The warning took the gloss off more positive CML figures, which showed a fifth successive month of year-on-year growth in mortgage loans in December. A total of £13.2bn was handed to homeowners during the month, up 12 per cent on a year ago, but the recent strength comes in comparison with a particularly soft period for the housing market when sentiment was sapped by the Chancellor's comprehensive spending review.
The CML is pinning hopes on easing inflation pressure this year.Reuse content