A rumoured imminent rally in the housing market has failed to materialise, as the latest round of bleak housing market data confirms, despite attempts by estate agents to inject a positive note.

Mortgage lending will contract by almost 20% this year, reflecting the market uncertainty, falling house prices, and rising arrears, market analyst Datamonitor has warned. In the first six months of this year, gross lending amounted to just £149.5bn, a steep fall of almost 19% from £178bn in the first half of 2007. Datamonitor predicts that lending will shrink to a total of around £294bn in gross lending in 2008, this steep rate of decline easing off to a further 3% fall in 2009.

The Independent