Mortgage lending slumps by 19pc Eurozone developments are highly uncertain and have the potential to undermine UK economic prospects and conditions in our housing and mortgage markets. The underlying picture is likely to be one of easing momentum in the housing market, but with potential for a sharper downwards correction on bad eurozone news. Mark Harris, chief executive of SPF Private Clients, the mortgage broker, said: "April's dip in mortgage lending was inevitable following March's spike in activity created by first-time buyers rushing to buy before the end of the stamp duty holiday. Not only are we far from a sustained recovery in the housing market, there is now an even bigger problem on the horizon in the shape of the eurozone crisis. The cross-border nature of banking means that UK banks cannot remain immune to what happens in the eurozone. Lenders have already indicated that they have less appetite to lend and, if the crisis continues, it will be even harder to get funding. Mortgage rates have started edging upwards and we expect this to continue. Richard Sexton, director of e.surv, the chartered surveyors, said: "The mortgage market has gone into reverse. Borrowers are being hit hard by rate rises and tightening lending criteria as banks scramble to protect their balance sheets from the impact of the 'Grexit' [Greece leaving the eurozone], which looks more inevitable by the day. The turmoil in the financial markets has increased the cost of funding mortgages by 40pc since February. Banks have shipped these costs onto consumers in the guise of higher rates and fewer loans to low income borrowers. Worse will follow if Greece falls on its sword.