New figures from the Council of Mortgage Lenders (CML) have revealed that mortgage lending halved last year to its lowest level since 1974. House purchases were down by 49 per cent last year from 2007 to a total of just 516,000. Worryingly, there is evidence of a worsening trend, with just 32,000 house loans made in December – a 5 per cent decrease on the previous month and the worst month in six years.
Remortgage deals were also scarce in December, down by 26 per cent from November to just 40,000 loans, suggesting that the cautious approach displayed by virtually all lenders is leaving with borrowers with little alternative than to stay with their existing deals.
Michael Coogan, the CML director-general, said, ‘The shortage of mortgage funding and reduction in the number of active lenders has reshaped the mortgage landscape in the space of a year. This low level of transactions is insufficient for the functioning of an efficient market. Measures are now in place to seek to restore the flow of funding to the mortgage market, but this will take time to feed through. Further action may still be necessary to increase transactions, stabilise prices and restore confidence.’
Home Loan Levels at Lowest Level Since 1974
Home Loan Levels at Lowest Level Since 1974
Fri, 13 Feb 2009
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