UK mortgage lending will have a slow start to 2010 but will pick up as the year progresses, hedge funds have been told.

UK mortgage lending will have a slow start to 2010 but will pick up as the year progresses, hedge funds have been told.

Bernard Clarke, spokesman for the Council of Mortgage Lenders (CML), claimed that strong lending activity at the end of 2009 will suppress the market at the beginning of this year.

Hedge funds should wait for the active wholesale funding market to pick up, as this will transform the sector, he said.

He added that the key problem affecting lenders in this sector is the shortage of mortgage funding, which could be impeding its recovery.

Mr Clarke stated: "We identified a £300 billion shortfall and, unless we have the restoration of wholesale funding markets, [it will be] very slow in terms of recovery."

Recent CML figures showed that gross mortgage lending in December 2009 reached an estimated £13.7 billion, up 14 per cent from the £12.1 billion recorded in November.