Mortgage rationing could get worse states CML

The Council of Mortgage Lenders has recently warned that mortgage rationing in the UK could continue to get worse, adding that mortgage lending has already been restricted for the past year due to the effects of the global credit crunch but that the restrictions on lending levels could get even worse over the coming year. A senior official from the CML, Michael Coogan, said that things could get increasingly difficult for many people as a result of the ongoing restrictions on mortgages.

He said that whilst the government had tried to intervene by ploughing billions of pounds into the mortgage lending industry in order to increase liquidity there were still many problems and the market had become a dysfunctional one. He said that the sector had returned to mortgage rationing, and the problems that many consumers have had when trying to get a mortgage in the current climate were set to continue.

Over the past year, since the onset of the global credit crunch, many people have found it difficult or impossible to get an affordable mortgages, with lenders having really tightened their belts when it comes to handing out finance to those looking to purchase a property.

Mr Coogan stated: ‘Unless Government takes further targeted action to help market participants, we will see a worsening picture next year compared with this.’

First time buyers have been particularly hard hit by the restrictions that have been placed on mortgage lending, and this is for a number of reasons. First timers still have to deal with the lack of mortgage deals on the market at present, but in addition to this are struggling to cope with the increased deposit requirements that lenders have put in place, with many having little in the way of savings and no equity to put towards the deposit.

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