Mortgage markets still look bleak

According to a leading industry group the mortgage market in the UK still looks bleak, with the lenders stating that it has become ’stuck in a rut’. Over the course of February it is claimed that the low levels of lending have continued. Officials have said that the level of lending for the month of February were nearly as low as they were for January, with around £9.5 billion of gross lending.

The Council of Mortgage Lenders released the figures, and they have stated that it is likely that this year will continue to be a challenging and difficult one when it comes to the mortgage and property sectors. Another survey has revealed how the cost of renting has shot up as a result of so many people being unable or unwilling to get a mortgage, which has resulted in a higher demand for rented property.

The Council of Mortgage Lenders has said that part of the problem stems from restrictions amongst lenders when it comes to granting mortgage finance. However, the group also said that there was a definite drop in consumer appetite for new borrowing, with many people too worried about their financial situations and their job security to risk taking on a huge mortgage.

One official also commented on the increase in rents and demand for rented property, stating: “The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February. The consistently constrained level of lending to home buyers has bolstered demand – and rents – in the private rental sector during what is typically a slower period. With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly.”

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