Quiet Times For The Loan And Mortgage Market
New lending on loans and mortgages has fallen to a record low level for the month of May, according to reports from various sources.
The British Bankers Association (BBA) reported that house sales were at the lowest level recorded since records began in 1997, with fewer than 28000 sales completing for the month of May. This figure is down by 20 per cent from last month alone and 56 per cent lower than the same time last year.
As a result, the number of new mortgage applications was also down proportionately and the BBA blamed a combination of tighter lending criteria and greater economic and financial pressures on households for the slow down in applications for new home loans.
At the same time however, remortgage applications have increased as home owners continue to shop around for a cheaper option on their mortgage, particularly those who are reaching the end of their current cheap loan deal.
At the same time as this, the price comparison website Moneysupermarket has reported that its profits are down for the first six months of the year as the credit crunch continues to affect the loan and mortgage market. As a result the group has made the decision to significantly scale down its dealings with financial intermediaries in the loan packaging part of the business.
A spokesman for Moneysupermarket said that the loan and mortgage market remained extremely challenging and that the figures had got worse through the second quarter of the year. Other areas of the business remain strong however and the chief executive of the group said “The strength of our diversified strategy is really evident in the first half. The problems in the UK loan and mortgage markets are well documented and have naturally impacted our activities in that area.”
