Mortgage lending in UK increases, Council of Mortage Lenders reveal
21st November 2008 - 11:16
While economists do not expect a dramatic improvement in mortgage lending, they said the Bank of England cutting interest rates will help to stop a further decline.
Mortgage lending increased by 7 per cent last month despite remaining at one of its lowest levels on record, the Council of Mortgage Lenders revealed.
Gross mortgage lending was £18.7 billion in October, up from the £17.5 billion lent in September, but down 44 per cent compared to the same month a year ago when the figure was £33.4 billion.
The Bank of England cut rates by 1.5 percentage points to 3 per cent earlier this month and is widely expected to cut rates again when its rate setters meet again in December.
Howard Archer, an economist at Global Insight, said: “Mortgage lending is so low that it would be hard for it to go lower.
“There are signs that credit conditions are easing, and further rate cuts will help,” he added.
Melanie Bien, of mortgage brokers Savills Private Finance, said: “Encouraged by the prospect of future rates cuts, we expect mortgage lending figures to stabilize and start to improve.”
But Mr Archer added that housing market would still struggle amid the economic downturn, falling house prices and growing fears about unemployment.
“Why would you buy a house now if you did not have to,” he said.
Almost £1,000 a week is being wiped off the value of the average house each week, according to Halifax.
(Source: Google)
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