Tightened Loan Credit Standards Contribute to Mortgage Slowdown

Mon, 31 Dec 2007

Figures released by the British Bankers’ Association have offered further evidence of a housing slowdown. The figures reveal that total mortgage lending is at its lowest point since September 2006, which, at £16.9 billion, is £2 billion under the six-month average of £18.9 billion. A slowdown in the housing market had been expected since the sub-prime crisis in the US and the ensuing credit crisis.

Furthermore, the value of mortgages taken by homebuyers in November was £7 billion, 40 per cent down on the £11.8 billion in November 2006. The figures also showed that November’s total lending secured on properties was down by nearly a third on the previous year.

Meanwhile, credit card repayments continued to exceed new borrowings, with £7.7 billion exceeding the £7.4 billion of new borrowings. As of the end of November, outstanding credit card repayments stood at £30.3 billion, though that figure is sure to rise in the Christmas month of December.
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