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More help urged for mortgage market

More help urged for mortgage market

Category: Mortgages

Updated: 21/05/2010
First Published: 21/05/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The new government has been urged to address the funding issues in the mortgage market after lending dropped to its lowest April total since 2000.

The latest data from the Council of Mortgage Lenders (CML) showed gross mortgage lending declined to an estimated £10.2 billion last month, 12% lower than in March and 1% down on April last year.

Signs in recent months have pointed to an increase in the number of mortgage deals on the market, with more higher loan-to-value mortgages becoming available and mortgage rates falling slightly.

However, the CML said it remained a difficult market, particularly for first time buyers without large deposits, and lenders who continue to face funding challenges.

The imminent squeeze on public finances is expected to drag on the speed of the recovery, and in turn slow the pick up in the housing market.

More positive, however, is the expectation of support for the market, after the Bank of England's welcome of plans to address the deficit in the public finances seemingly paved the way for interest rates to be kept lower for longer.

"We welcome signs in the coalition agreement that some housing priorities are on the government's radar," said CML director general, Michael Coogan. "But we still do not know how the incoming government plans to address the funding gap looming over the next few years in the mortgage market.

"It is important that the new government grasps this nettle."

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