UPDATE: CML: UK House Purchase Loans Down 44% On Yr In May

UPDATE: CML: UK House Purchase Loans Down 44% On Yr In May

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LONDON (Dow Jones)--U.K. lending for house purchases increased 2% in May but was substantially lower on the year as the housing market continued to suffer from the credit crisis and concerns about the economic outlook, data from the Council of Mortgage Lenders showed Tuesday.

Loans for house purchase totaled GBP7.9 billion in May, up from GBP7.7 billion in April but down from GBP14.2 billion in May last year, the CML said. The number of mortgages that were completed increased 4% on the month to 52,700, but that was also 44% weaker than in May 2007.

Gross lending fell 6% on the month and 22% on the year to GBP24.5 billion, marking its seventh consecutive monthly drop.

There was a 14% decline in remortgaging loans in May to 71,000, representing a 23% drop on the year, it said.

"Lending levels continue to be lower than last year and any recovery is still some way away, with little sign of the special liquidity scheme increasing the flow of funds to the industry or lowering the cost of funds as hoped," CML Director General Michael Coogan said in a statement.

The Bank of England launched a facility in April to allow banks to swap around GBP50 billion of mortgage-backed and other securities for U.K. treasury bills in an effort to improve the liquidity of the banking system and increase confidence in financial markets.