The figures were revealed yesterday and show that mortgage lending in December 2008 totalled £12.6billion, down 11 per cent from £14.2billion in November 2008, and 47 per cent lower than December 2007.

The numbers for December 2008 are, according to the CML, the lowest monthly mortgage lending figures since April 2001, and the annual total for 2008 is the lowest since 2002.

Commenting, Michael Coogan, CML director general said: “December is typically a quiet month in the mortgage market, on top of which the market has been constrained by a shortage of funding and reduced demand.”

Speaking of the Government’s latest package, intended to boost the mortgage market, he added: “This week’s package of measures to support the financial system and invigorate new lending was an essential and welcome move by the Government.

“The next challenge is to settle the detailed requirements for each measure, so that they can be used by as wide a range of market participants as possible, as soon as possible.”

In fact, according to the CML, recent mortgage approval figures from the Bank of England suggest that lending will decline further in the coming months, Mr Coogan concluded:

“Further measures targeted at the housing market are likely to be needed to supplement yesterday’s welcome intervention to address liquidity and capital concerns.”

According to the National Association of Estate Agents (NAEA), the housing market “has picked up significantly in January,” chief executive of the NAEA, Peter Bolton King comments:

“It is up to Mervyn King to live up to his promise to do everything possible to bring fluidity back into the market. NAEA can confirm that there are bargains to be had in the market at the moment, but if the banks won’t increase lending this upturn in the market will be short-lived and consumer hope will be dashed again.”

Nevertheless, it seems that mortgage rates are coming down. Abbey has today announced new rates on its tracker mortgage and fixed rate mortgage deals, its lowest tracker rate is now 3.99 per cent, while HSBC has recently announced a discount mortgage rate of 2.99 per cent.

© Fair Investment Company Ltd