Home Owner Loan Numbers Fall By 14 Per Cent
The first half of this year saw a steady increase in the number of new home owner loans and mortgages being taken out, sparking optimism about the recovery of the housing and home owner loan markets, as well as the UK economy as a whole.
However, as many experts had already predicted earlier in the year, the second half of the year has seen a significant slow down in the number of new loans, as potential borrowers remain cautious about their financial futures.
According to the latest figures from the Council of Mortgage Lenders (CML), there was £11.4 billion offered in new loans throughout the month of August, a 14 per cent decrease in lending compared with the figures for July (£13.3 billion) and the lowest level of new loans in the past ten years.
The majority of experts do not expect to see any significant increase in home owner loan activity for the remainder of this year and the CML have predicted that the next six months are likely to be particularly difficult for those looking for a new loan, due to the proposed Government spending cuts.
Bob Pannell of the CML commented on the situation and the slow down in property price growth, he said “Demand is subdued and there are signs of more properties coming on to the market following the abolition of home information packs.”
“And more significantly, the supply of credit remains limited. There are a few more high loan to value products available than a year ago, but it is still comparatively difficult to access credit.”
“However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers.”
