Mortgage Lending Hits 10 Year Low

Gross mortgage lending in September totalled £12billion, which is the lowest September total since year 2000.

At £12billion, the total amount of mortgage lending in September was one per cent lower than in August and 7% lower than in September 2009.

Failing consumer confidence both in the future for house prices and the strength of the economy is deterring consumers from investing in property. Mortgages are still dificult to secure and this is unlikely to change for the rest of the year, which will continue to make buying a home difficult.

The impact of the public spending cuts, due to be announced in the spending review later today, and their effect on public sector employment also appears to be weighing on consumer confidence.

Areas with large numbers of public sector workers, some of whom are likely to lose their jobs in the coming months, are expected to experience falling property prices as people fear for their job security.

According to Michael Coogan, director general of the Council of Mortgage Lenders, the Government should be finding ways to resolve some of the housing problems that the country is experiencing, even in these difficult financial circumstances:

“Despite the pressures on government finances, today’s comprehensive spending review is no time to make further cuts in state support for borrowers in difficulty.”

“A concerted effort by borrowers, lenders, the government and money advice agencies has helped to keep mortgage arrears and possessions in check during the current economic downturn. These support measures help contain the wider costs of homelessness, and deliver wider benefits to the government. Now is not the time to weaken the existing safety net.”