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| ::Mortgage lending slump continues - 12th March 2009 |
| Mortgage lending continued to fall in January, according to the Council of Mortgage Lenders (CML). Just 23,400 mortgages were completed for all house buyers, a new record low, with only 8,900 first-time buyers able to take out home loans. The number of mortgages lent was down by 28% from December, and 52% lower than in January 2008. The CML said the recession and falling house prices were forcing lenders to ration their lending even more. "January and February are usually the quietest months in the mortgage market," said Michael Coogan, the CML's director general. "The current withdrawal of many specialist, small and foreign lenders from new lending has created a huge gap in the capacity to fund mortgages to match consumer demand and this is continuing in 2009," he added. Rationing With lenders increasingly restricting their loans in response to their own funding problems, first-time buyers in particular are having to put down ever-larger deposits. Mortgage lending continued to fall in January, according to the Council of Mortgage Lenders (CML). Just 23,400 mortgages were completed for all house buyers, a new record low, with only 8,900 first-time buyers able to take out home loans. The number of mortgages lent was down by 28% from December, and 52% lower than in January 2008. The CML said the recession and falling house prices were forcing lenders to ration their lending even more. "January and February are usually the quietest months in the mortgage market," said Michael Coogan, the CML's director general. "The current withdrawal of many specialist, small and foreign lenders from new lending has created a huge gap in the capacity to fund mortgages to match consumer demand and this is continuing in 2009," he added. Rationing With lenders increasingly restricting their loans in response to their own funding problems, first-time buyers in particular are having to put down ever-larger deposits. The average first-time buyers' down payment has now reached 24% of the value of the property they are buying, a new record. With prices continuing to fall, the dwindling number of first-time buyers are typically borrowing only £97,000, the lowest figure since the summer of 2005. House movers are also borrowing less, at £117,000, which was also the smallest loan size for this group of borrowers since the middle of 2005. And they are putting down an average deposit of 35% of the value of their new properties, the highest level since 1984. "We have reached the nadir in terms of purchases but recovery will be slow and modest," said Ray Boulger of mortgage brokers John Charcol. Middle-aged movers The CML's figures reveal that moving house has become the prerogative of the middle-aged. These are likely to be people who still have some substantial equity in their homes, which has not been completely eroded by the house price falls of the past year and a half. In January, the average age of home movers - people who were moving from one mortgaged property to another - hit 41, the oldest since records began in 1974. The average first-time buyer is still 29, in line with their average age over the past four years, but in the past two years their numbers have shrunk by two-thirds. Meanwhile the property website Globrix said that asking prices in a few towns and cities had fallen by 20% in just the past six moths. The average asking price is down 11% across the UK. But in Blackpool the fall has been 28%, with Lewes and Windsor showing drops of 22% and 21% respectively. |
| Source of this article : |
| From bbc/news.co.uk - 12th March 2009 |
| Date of this item added : |
| 2009-03-13 |