The council of mortgage lenders says that mortgage lending remains static in October and will continue to do so for the next few months at least.
In October mortgage lending was the same as in September; £12.4 billion – the lowest figure since October 2000. The Council of Mortgage Lenders also said that mortgage lending in the coming months would probably be less than the same period last year.
“The month-on-month annual comparison is likely to continue to decrease a little in the coming months, because underlying lending volumes rose sharply in the latter part of 2009 as borrowers rushed to take advantage of the stamp duty concession before the end of the year,” the CML said.
The tightening of lending criteria across the housing market has been the main driving force behind falling house prices.
The Royal institution of Chartered Surveyors (RICS) has also highlighted the fact that more sellers than buyers is also a major factor in the downturn in property prices.
Craig Gedey Marketing Manager at Debt Advisory Line www.debtadvisoryline.co.uk Award winning debt Management Company said: “The main issue for people trying to get a mortgage today will be the astronomical deposits required by lenders.”
“Over the past decade people have been able to borrow sometimes up to 5 times their annual incomes and beyond; this trend has definitely come to a halt since 2008.”
“Unfortunately deposits of 10 to 20 per cent and sometimes more are now commonplace as mortgage lenders keep their lending criteria tight.”
“At Debt Advisory Line we help people repay their unsecured debts and on average our customers reduce their repayments by 49 per cent.”
The rentals website Easyroommate.co.uk Jonathan Moore, said first time buyers are feeling it the most:
“Lenders continue to require colossal sums for deposits and this is simply unachievable for the thousands of people waiting to get on to the property ladder.”
“As a result, competition for rental accommodation is fiercer than ever, and rents continue to rise.”
“Borrowers are nervous, even more so since the Spending Review and confirmation of some half a million public sector job losses,” he said.
“This fear for their personal circumstances has certainly contributed towards the drop-off in mortgage applications.”
Property prices had seen a slight increase earlier this year but since the end of the summer prices have fallen.