Mortgage lending still on the decrease
June 3, 2008
According to the Bank of England mortgage lending in the UK continues to decline. The Bank of England recently released figures that showed how mortgage lending was still going down in the UK, with around 20% drop in mortgage lending for September this year compared to September of last year. The figures show that in September of this year there were 102,000 new mortgage approvals, which reflected a drop of 25,000 from the same period of last year and a fall of 6,000 from the previous month’s figures.
A number of factors have been attributed to the drop in mortgage lending. Reduced interest from potential buyers in light of high interest rates and high house prices has affected the number of mortgage applications being made, which in turn has affected the number of approvals. Increased stringency from lenders in light of the current credit crunch has also affected the number of new mortgage approvals.
According to predictions made by the Council of Mortgage Lenders 2008 will see the real effects of the cooling market, with repossessions expected to rise by 50% and property sales set to fall by 15%. One official from the Council of Mortgage Lenders stated: “We now expect a slower mortgage market next year, although by no means a stagnant one. Most borrowers will cope, but not everyone will escape unharmed from the effects of a slower market.”
Officials state that many homeowners will be concerned to see the figures released by the CML, as they affect homeowners that are looking to sell as well as those already struggling to meet their mortgage repayments, who could face repossession if they continue to default on mortgage repayments.
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