Home Loans at Record Low
The
mortgage market is shrinking due to continued banking system problems. New loans for home buyers fell to 50,300 in January, which is the lowest it has been in nine years. That is 25,500 fewer than January 2007.
Tougher criteria by lenders are forcing borrowers to put down larger deposits and accept smaller mortgage offers. This is impacting the ability of first-time buyers to get into the housing market.
The financial crisis that struck the banking system last summer means that lenders are finding it difficult to raise funds to offer mortgages to their customers. As such, lenders are becoming more stringent with their criteria of who they will lend to and on what terms. Loan to value ratios are also being reduced.
The government's house price survey shows that house price inflation is continuing to slow down.
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Government, finance, lending