Slump in mortgage lending

It has been reported by the British Bankers’ Association (BBA) that September 2010 saw a decrease in the number of new mortgages approved by high street banks.

In total, net mortgage lending by high street banks amounted to £1.6 billion in September , which is the record low since October 2000.

The recent figures demonstrate that there will be not much activity on the UK mortgage market in the nearest future.

In addition, mortgage professionals claim that the housing market will inevitably be hampered by the Government’s Spending Review because potential buyers will exhibit caution.

In related news, it has been revealed by HMRC that fewer homes were sold in August in the UK.

According to HMRC, 85,000 homes worth at least £40,000 or more were sold in the month, which is the first substantial decrease recorded during the current year.

At the moment, the perspectives for the housing market don’t look promising and most experts are unanimous in thinking that house prices will continue to fall. Moreover, many of them seriously think that lending could slump even more significantly.

As for house prices, they are also likely to fall. According to the latest Halifax House Price Index, there was a 3.6 per cent decrease in the value of UK properties in September.

 


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