The Council of Mortgage Lenders has indicated that mortgages may be rationed for many years to come, although their latest figures show a recovery in the market of 25% between March and February.
Although the number of loans made to people buying a house for the first time has recovered faster than those made to people already on the housing ladder, this may be jeopardised unless the new government assisted lenders in raising finance
The total amount of lending to home buyers for January to April of this year was down 35% on the preceding three months.
Michael Coogan, director general of the Council of Mortgage Lenders said:
“Today’s figures indicate there is currently some momentum to house purchase lending.
“But for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis.
“The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come.”
The problem seems to lie with banks having to repay the funds granted to them during the banking crisis two years ago, which is reducing the funds available for home loans.
There are more mortgage deals available however, and although there are very few requiring a 0% or 5% deposit the number requiring 10% – 15% rose 59 to 520. As ever, it’s advisable to consult a qualified mortgage advisor to advise you of the best deals available.
Up to now, there has been no word from financial authorities on how they plan to deal with the situation.