February 16, 2009
Mortgage Lending At Lowest Level Since The 70's
Mortgage lending fell sharply in 2008 and is at the lowest level since 1974, according to lenders.
This is great news for those of us who are already landlords or those thinking about becoming one in the near future. Fewer Mortgages = Less Property to rent = Higher profits!!
The Council of Mortgage Lenders (CML) said 516,000 house purchase loans were approved in 2008, a decline of 49 per cent from 2007, as lenders tightened criteria.
There were just 32,000 house purchase loans in December, a five per cent decline from November and the lowest level since monthly records began in 2002.
Michael Coogan, CML director general, said: "This low level of transactions is insufficient for the functioning of an efficient market.
"Measures are now in place to seek to restore the flow of funding to the mortgage market, but this will take time to feed through. Further action may still be necessary to increase transactions, stabilise prices and restore confidence."
Analysts are predicting net lending will turn negative in 2009, with more people paying off their mortgage than borrowing.
However, the tumbling interest rate benefited many on variable deals, the CML confirmed.
Interest payments typically consumed 13.2 per cent of home movers' income in December, compared with 17.9 per cent a year earlier.
Tracker mortgage products increased in popularity in 2008 as official rates declined, accounting for 29 per cent of new loans, compared with 16 per cent in 2007.
In addition, 74 per cent of first-time buyers paid no stamp duty after the threshold was raised, compared to 40 per cent in 2007.
