Mortgage Lenders Defend Their Policies
The government has criticised mortgage lenders saying that their caution is damaging the housing market and they are not hungry enough for business.
In response, the Council of Mortgage Lenders (CML) said its lenders do want to encourage first time buyers to get onto the property ladder, however, they are balancing this up with not wanting to offer ‘undue incentives’. A CML spokesperson said:
“Lenders have to exercise quite a difficult judgement about encouraging first-time buyers without giving undue incentives which perhaps draw in too many at too young an age or with too uncertain an income.”
A director of the Financial Services Authority also added that he believed, as an ‘educated guess’, that many people are shunning the property market because they still believe house prices might fall further.
The main mortgage market at the moment is certainly in remortgages and this is where many mortgage advisors will be picking up their business at the moment.
According to Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors, there has been an increase in enquiries from people about properties, which is an encouraging sign.
Posted on October 15, 2008
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