Mortgage lending in UK to remain subdued

According to a mortgage industry group mortgage lending in the UK is likely to remain subdued and could go into decline as the year comes to an end. Lenders are said to have loosened up on their restrictions over mortgage lending over recent months following the financial chaos caused by the credit crisis and the recession, but many are still struggling to get the finance that they need to buy a property.

The Council of Mortgage Lenders claims that the mortgage market is likely to continue its decline, with the number of loans approved for the month of October this year down by 9 percent for the same month last year. This was also the lowest total for the month of October since 2000. The group said that year on year lending levels for mortgages are likely to continue their decline over the coming months.

The Council of Mortgage Lenders has also stated that the total gross mortgage lending figure for the whole of this year is likely to reach £137 billion, which is thought to be the lowest since 2001. Many first time buyers are still struggling to get a mortgage at the moment, which has left many unable to get onto the property ladder, forcing them to have to rent and driving up the cost of renting a property.

However, in a separate study that was carried out by Sainsbury’s Finance it was claimed that the rock bottom base interest rate, which still stands at just 0.5 percent, is resulting in homeowners’ mortgage repayments plummeting, with the average cost of mortgage repayments said to have fallen by around 27.67 percent since 2008. This takes the figure for mortgage repayments to an average of £8059 per year according to the figures from the supermarket giant.

Tags: mortgage, Banking, credit, Subprime crisis impact timeline, Loans, decline, mortgage industry group, finance

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Tags: mortgage, Mortgage loan, first time buyer, Real estate, Subprime crisis impact timeline