Mortgage lending hits its lowest Level for 33 Years
Mortgage lending to home buyers has hit its lowest level for 33 years, according to figures from the Council of Mortgage Lenders (CML).
Just 47,000 such mortgages were lent in March, taking the total for the first three months of the year to 142,000.
This has been the lowest quarterly total since the first three months of 1975.
The CML predicted lending and house sales would probably fall even further in the next few months as the credit crunch continues affect the banking system.
The figures are in line with the latest survey from the Royal Institution of Chartered Surveyors, which said that falls in house prices were now more widespread than at any time since 1978.
In an attempt to overcome the effects of the credit crunch, the Bank of England recently made extra funds available to UK banks to encourage them to start lending to each other again but so far this is having little affect and Libor still remains high relative to the Bank rate and any improvement in credit market conditions will take time to feed through into the mortgage market
However, one of the biggest mortgage lenders, the Nationwide building society, cut some of its fixed rate loans for new borrowers by up to 0.3%.
The society said it was responding to the Bank of England’s move to restore lending between banks.
Last week though, the Building Societies Association warned that the current blockage in the mortgage market might last for another two years.
First-time buyers
The number of mortgages for house purchase has now fallen by 40% over the past year And first-time buyers are continuing to be squeezed out even more than before.
There were 17,800 first-time buyer loans in March, the lowest monthly level on record since monthly figures were first compiled in 2002.
This took the number of first-time buyer mortgages in the first quarter of 2008 to 53,700, which was the lowest quarterly figure since the start of 1975.
If your thinking of applying for a mortgage or loan in the near future its more important than ever to make sure the information held on your credit file is accurate and up to date as the smallest error could lead to you being refused credit or charged a higher interest rate costing you thousands even tens of thousands over a mortgage term whilst the banks are tightening there belts.
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