February is typically the weakest month for mortgage completions. And although this is a larger decline than the 3-4% usually experienced between January and February, it is in-line with our forecast of £145 billion gross mortgage lending in 2009.
Michael Coogan, CML director general, said: "Retail savings are now the predominant source of funding for mortgages. But banks and building societies have seen savings ebb away to National Savings and Investments, which has a negative impact on their ability to lend.
"This is yet another example of fractured policy. There are now fewer active lenders in the market, but the government wants them to lend more. At the same time, the government's own savings institution is sucking away the funds that would enable them to do so. Until funding improves, the capacity of lenders to lend will remain constrained."
Liberal Democrat Shadow Housing Minister, Sarah Teather said: "The Government allowed the bubble in the housing market to get out of hand for many years. We are now seeing the results of that bubble bursting, with a collapse in house prices and new housing developments being mothballed.
"Ministers should now allow councils to borrow money to buy up cheap land and empty properties to save construction jobs and rebuild Britain's dwindling stock of social housing."
