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Mortgage lenders can look forward with confidence

Mortgage lenders can look forward with confidence

Category: Mortgages

Updated: 06/05/2010
First Published: 06/05/2010

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Despite challenging conditions, 2009 was a year of steady improvement in the mortgage sector although huge challenges remain, the Council of Mortgage Lenders (CML) has said.

Following the trying 12 months of 2008, last year saw conditions improve in the mortgage market somewhat, particularly after prices recovered from the trough seen in April 2009.

Since then, prices have recovered well, with various studies and surveys showing that most regions in the UK have enjoyed many successive months of rises in house prices.

Credit conditions have also eased, and lenders have recently started to offer more competitive products for potential home buyers with small deposits.

The CML said that the industry could look back on tough times and to the future with greater confidence, while insisting that the UK mortgage market has worked well for the majority of borrowers in the last year.

"Despite continuing improvement, however, the mortgage market remains small and risk-averse. There are still enormous challenges ahead for lenders," said the body.

These included too few participants, insufficient funds to meet the demands of borrowers, and political and regulatory uncertainty, which is magnified by the UK's sizeable deficit.

The body also predicted that 53,000 repossessions would be made this year, more than the 46,000 that were recorded in 2009, although this estimate could be revised downwards if the mortgage arena improves.

"Our goal is to restore once again for consumer the benefit of a thriving, well-funded, diverse and competitive UK mortgage market, which serves responsibly a broad range of borrowers' needs at every stage of their lives," said the CML.

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