Lenders blamed for falling property transactions

Mortgage lenders have been blamed for the slump in property transactions in the UK.

Commenting after government figures indicated that the number of house sales dropped by 13 per cent in May, Louise Cuming, head of mortgages at moneysupermarket.com, put the blame at the feet of lenders.

She said that the fall was unsurprising but added that the drop of over 30 per cent when compared to the same month in 2007 was still "a nasty surprise".

"The mortgage industry should bear much of the blame for the stagnation of the housing market as lenders have distorted the landscape significantly over the past 12 months," Ms Cuming said.

"The mortgage market is unrecognisable today, with the sheer number of products decreasing every day – from more than 30,000 in August 2007 to around 5,000 today."

Ms Cuming added that it was also getting more expensive to borrow money for property purchases and that lenders were tightening their criteria for customers.

"Lenders have done a complete U-turn in respect of the risk they are prepared to take when lending, which is specifically affecting borrowers with little or no deposit or equity," she pointed out.

"This in turn directly affects first-time buyers, who are the absolute lifeblood of the housing industry."