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2008 saw 30 percent drop in mortgages

March 2, 2009 by admin  
Filed under News, News-Mortgages

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Over the past twelve months mortgage lending has fallen by around 30 percent according to officials from the Council of Mortgage Lenders. This drop in mortgage lending has apparently resulted in lending falling to its lowest levels since 2002. Total mortgage lending last year fell to £256.4 billion, whereas the previous year mortgage lending levels came to £363.7 billion.

Since the start of the global there has been a severe shortage of mortgages, and many lenders have slashed the number of mortgage products on offer, leaving consumers with very little choice. In addition to this mortgage lending criteria has become far stricter, and many of those that may have qualified for a mortgage previously may now struggle to get finance because of the more stringent criteria in place.

One industry expert stated: “With the economic situation deteriorating by the day, the banking system in crisis and consumer confidence at an all time low, it’s hard to believe mortgage activity will pick up any time soon, whatever the government does. Even if banks do start lending more, the question now is will people want to borrow? Faced with such uncertainty, the last thing on many people’s minds will be moving house.”

Many people have found that they cannot afford to take out a mortgage even though interest rates have been plummeting for the past six months, taking them down to the lowest levels in history. The reason for this lack of affordability for consumers is that lenders are now demanding far higher deposits from borrowers, which many – particularly first time buyers – simply cannot afford.

Mortgage lending levels in December of 2008 were 50 percent lower than the same period in 2007, and the Council of Mortgage Lenders said: “December is typically a quiet month in the mortgage market, on top of which the market has been constrained by a shortage of funding and reduced demand.”

Tags: credit crunch, percent drop, mortgage drop, percent, interest, Credit (finance), number, thing

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