Mortgage Lending 'to Witness Falls Before Upturn'
An expert has said that home credit lending in the UK will drop further before seeing an upturn.
Mortgage and home credit lending figures are set to drop further in the near future prior to witnessing an upturn, an expert has said.
According to Andy Pratt, chief operating officer at Alexander Hall, positive figures released by the Council of Mortgage Lenders (CML) yesterday (September 13th) are based on deals completed for products such as tracker mortgage packages and early indications show that approvals seen throughout August are likely to decrease.
The CML stated that the number of mortgages being approved in July rose to 56,000 from 52,000 one month earlier, but the organisation added that the market remains "very weak" in the aftermath of the recession.
And Mr Pratt agreed with this assessment, remarking that he believes the applications made last month were worse than the seasonally adjusted expectations.
"I think this is the lowest point," he added.
Meanwhile, CML statistics displayed the fact that first-time buyers made up the lowest proportion of the home credit sector since August 2007 last that have "limited charges of money at a higher loan-to-value" in order to protect the "lifeblood" of the industry.
Loans to first-timers declined to 19,400 in July, a fall of 700 year-on-year.
Nevertheless, the specialist does not anticipate such measures being sufficient to attract significant numbers of new first-time buyers into the sector as they will only serve to ease lending criteria slightly.
However, Mr Pratt concluded that the future is brighter for the home credit arena in the UK as there "is always a good increase [around September] due to the fact that there are more properties on the market as autumn approaches.
"Finance is going to act as a limiting factor, but I think that activity is looking better in September," he said.
by: Sam Gooch
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