Thrifty Loans

According to industry officials the level of mortgage lending in February dropped by 7%, with a total sum of around £24 billion being borrowed for the months compared to £25.9 billion in January.

This reflected a 6% fall compared to mortgage lending levels in February according to officials from the Council of Mortgage Lenders.

The CML has described the current situation as a ’slower phase in the housing market’ adding that this is set to continue until some action is taken by the Bank of England to try and ease the situation.

The Bank of England has recently increased weekly funding for the mortgage market, and a senior official from the CML described this as a ’step in the right direction’.

However, he also added that “a programme of more aggressive, broader-based intervention would be entirely appropriate for the Bank in the current environment of uncertainty.”

A recent report has shown that many people are now finding it difficult to get a mortgage with a deposit of 5%, which is the traditional deposit required for a mortgage, and this is because many lenders have raised their deposit requirements as a result of the global credit crunch, which has impacted severely on the mortgage industry and on the ability of both lenders and consumers to secure the finance that they need.

The official from the Council of Mortgage Lenders went on to state: “Demand for mortgages remains strong but cannot be fully met from existing funding. This has led many lenders to reduce their product ranges, increase their mortgage prices and, in some cases, to reduce their lending capacity.”