Mortgage lending falls back again, lenders say

Estate agent's window The property market is still very quiet with sales less than half the level of a few years ago

Total mortgage lending fell back in October, the Council of Mortgage Lenders (CML) says.

Banks and building societies lent a further £13.1bn, which was 4% down from September, though still 16% up on the same month last year.

The CML said the market was still subdued, with lending boosted by people remortgaging rather than moving house.

Prices have been flat in the past year, with sales still at half their pre-recession levels.

"The immediate direction of house purchase activity is a little unclear, although the story for remortgages, with strong year-on-year increases in activity this year, is for the time being more straightforward," said CML chief economist Bob Pannell.

Richard Sexton of chartered surveyors e.surv took a much more dismal view and said banks were in no position to increase their lending.

"Insipid economic growth, and restricted supply of credit are sapping the life from the market and forcing banks to target wealthier borrowers and professional buy-to-let investors," he said.

"A meagre one in every 100 loans were to borrowers with a deposit of 10% or under, compared to 13 in every 100 in 2007.

"Unless the economy gets moving, and the crisis wreaking havoc in the eurozone dissipates, there is a very real chance the first time buyer market will enter a state of near paralysis," Mr Sexton added.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

Elsewhere on the BBC

  • SpiderWeb of wonder

    BBC Earth takes a unique journey inside the body of a giant tarantula

Programmes

  • Cinema audienceClick Watch

    Brighter 3D films - the new laser-based system promising to deliver crisper, clearer movies

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.