Mortgage lending continues to fall

The British Bankers Association has today released information which provides a further insight into the UK’s struggling housing market and economy. Mortgage lending fell to a new low in November, with a 14% drop following October. The most alarming statistic revealed is that mortgage lending has fallen by 60.7% over the past year.

The significant slump in mortgage lending is in direct correlation with a struggling economy and continued stringent lending conditions. Those who wish to take out mortgages are finding themselves met with difficult terms, including a requirement for a large deposit and high interest rates.
The dip may also be attributed to many people holding off following the 1.5% cut in the base rate by the Bank of England. It is possible that many people are waiting, expectantly for lenders to pass on the cut within their mortgage rates and lower the threshold for the amount of deposit required. However, some of the major banks have passed on the cut but have withdrawn some of their best deals.

Despite some banks passing on the cut, mortgage approvals have continued to decline, with the substantial decline in November being demonstrative of the small impact that the cut in the base rate has had on buyers. It would appear that buyers are holding off until better rates are offered, or simply that they are waiting until they can afford to put up a significant amount of money as a deposit on a home.

The average value of a mortgage has also fallen substantially, with the average mortgage in November 2008 at £116,700 in comparison to last June’s peak which was £159,600.

Borrowing in general has been fairly stagnant over the last month, despite the run up to Christmas. The British Bankers Association said that both overdraft and personal loan borrowing is particularly low. A lack of borrowing provides evidence that people are not only coping with more stringent budgets due to the lack of available credit but are also losing confidence in lenders who are offering credit.

With mortgage approvals at a new low this month, many people in the UK are faced with the problem of a house that they are unable to sell. If you are in this situation, Swift Capital may be able to help. We will buy any property in any condition and can often offer 80% of the market value of your home. This enables homeowners to sell property fast and release equity in the home. Contact Swift Capital today and see if we can provide you with a solution.