House prices predicted to fall further amid drop in mortgage lending - Telegraph

House prices predicted to fall further amid drop in mortgage lending - Telegraph

The Council of Mortgage lenders said gross lending fell to £9.8 billion in April, down from £11.4 billion in March, and 5 per cent lower than a year ago.

The bank holidays last month – including Easter and the Royal Wedding - saw many workers enjoy extended holidays in exchange for taking just a few days annual leave.

Bob Pannell, CML chief economist, said: “It represents an unfortunate temporary loss of signal, at a time when it would be useful to gauge the resilience of house purchase demand to economic uncertainties and the pressure on household incomes.

“Levels of activity look set to remain broadly flat over the near-term. It now seems unlikely that interest rates will rise much, if at all, this year and this should help keep the market on an even keel.”

Analysts warned reduced activity in the housing market would translate into falling house prices. The average value of a home in Britain has already dropped to £160,000, down from £200,000 four years ago before the beginning of the credit crisis.