Tue, 18 Sep 07
The latest statistics from the Building Societies Association (BSA) show that mortgage lending was down in June, as consumer confidence in the housing market collapses...
BSA's figures show that annual mortgage approvals were down from £6,046 million in June 2006 to £4,693 million in 2007. These figures come at a time when interest rates sit at a six-year high, with most analysts predicting further increases in the coming months.
As a result, the decline in mortgage take up is being blamed on interest rate rises, while the imminent introduction of Home information packs is also considered to be a potential factor.
Brian Morris, head of savings policy at the BSA, commented: "Although 2007 started strongly, it seems the impact of successive interest rate rises is now being felt and is affecting affordability. With many commentators expecting another rate rise soon, lending may well cool further over the remainder of the year and into 2008."
First time buyers squeezed out of the market
Julian King of National Homebuyers commented: "This comes as the National Association of Estate Agents reports that consumer confidence is low, there's a six per cent reduction in people looking to buy a house in June.
King continued: "However, the issue here is first-time buyers' ability to take out a mortgage. I have said before that traditionally, first time buyers account for 45-50 per cent of all property transactions. In 2005 this dipped to 30 per cent according to the Council for Mortgage Lenders. When this drops even further, the market will have only half of its potential buyers available. That's a disaster."
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