CML mortgage figures for March are down 2% from 2010, reflecting pressure on household finances, as analysts predict a continuing squeeze
Mortgage lending continued to fall in March, dropping 2% to �11.3bn from the �11.5bn advanced in the same month in 2010, according to latest figures from the Council of Mortgage Lenders.
While the monthly lending figure was up 21% on February, this reflects a seasonal trend and was marginally lower than the 22% rise between February and March 2010. Gross lending for the first quarter of the year was an estimated �30.1bn ? an 11% decline from the fourth quarter of 2010 (�33.9bn).
The CML figures come on the back of a report from analyst Datamonitor that claimed UK consumers will find it tough to obtain a mortgage throughout 2011 and might have to wait until 2014 before it becomes easier to get a home loan.
The CML said government measures introduced in the recent budget have had no effect on the housing market and the short-term outlook remains "highly uncertain", depending on how households respond to the "painful rebalancing of the economy". But it acknowledged that recent figures showing a drop in inflation may delay a rise in interest rates until later in the year, which offers "psychological breathing space" to lenders and borrowers alike.
CML chief economist Bob Pannell said: "The housing market has emerged hesitantly from hibernation. Household finances are under a lot of pressure, and as a result demand for house purchase loans fell in the first three months of 2011. Lenders expect mortgage credit availability to improve this quarter, and this should help to underpin house purchase activity, albeit at pretty low levels.
"Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates. Remortgage approvals in February were the highest for more than two years. Stronger remortgage activity looks set to continue propping up overall lending."
Jonathan Samuels, chief executive of Dragonfly Property Finance, said: "Mortgage lending may be up in March, but it's still down in historical terms. We certainly don't see this as the beginning of a trend given current conditions. For the rest of the year and on into 2012 the mainstream mortgage market ? and house prices generally ? will continue to flatline.
"Consumers are worried about their jobs and the direction of interest rates, which will affect their already stretched finances, and so are putting the biggest financial commitment of their lives on hold. High street lenders, meanwhile, are still in hiding and are only opening their arms to flawless, equity-rich applicants. Unfortunately, two negatives in the mortgage world do not make a positive."
Samuels added that first-time buyers and those borrowing at high loan-to-values have all but disappeared from the market, meaning those with larger deposits and cash buyers are propping up house prices at the higher end of the property market, especially in London and other "prime areas" of the country.
CML members collectively cover 94% of all residential mortgage lending in the UK. There are currently 11.4m mortgages in the UK, with loans worth more than �1.2tn.
Source: http://www.guardian.co.uk/money/2011/apr/20/mortgage-lending-falls-year-on-year
Social networking Self-catering Rugby league Opera Rihanna Dolomites
No comments:
Post a Comment