Home Owner Loan Numbers Continue To Fall
Despite some positive noises being made within the housing and home owner loan market, the number and amount of home owner loans in the UK is continuing to fall, according to the latest figures from the British Banking Association (BBA).
The figures from the BBA reveal that gross lending on home owner loans and mortgages stood at £8 billion during the month of September this year, which was almost 11 per cent lower than it was at the same time last year.
Although the amount of net lending on loans increased by 3.9 per cent in September, above the previous month, this figure is still less than it was twelve months earlier.
Lending on unsecured loans has also fallen dramatically, as many individuals try to repay as much of the loan debt as they can, rather than take out new loans, whilst interest rates are low.
With property prices relatively low and interest rates on loans at an all time low, there should be a large demand from consumers for home owner loans and mortgages at the moment, but lack of consumer confidence and uncertainty over the proposed government cuts are making people cautious about committing to a new loan.
The other factor is of course, that banks and building societies still seem to be extremely cautious about offering loans to anyone and appear to be looking for any reason to reject loan applications, even from credit worthy customers.
David Dooks of the BBA commented on the figures, he said “Subdued mortgage activity and little demand for unsecured loans are a reflection of household uncertainties ahead of the spending review.”
“Demand for new mortgages remains low despite more properties on the market and falling house prices. Business borrowing continues to reflect weak demand combined with companies reducing gearing by repaying bank borrowing.”
